Shhh! 7 Small-Cap Stocks That Can Double by 2025
Small cap stocks like those discussed below tend to receive much less attention than their large cap competitors. Shares, which boast a market capitalization between $250 million and $2 billion, remain relatively small. The largest stocks including Nvidia (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT) are valued into the trillions. It’s no surprise then that they receive the lion’s share of investor attention and capital.
As a result, there are a lot of deals to be had among small-cap stocks. Investors don’t hear about these names on a day-to-day basis and the media is certainly less likely to cover them. That doesn’t mean that investors should ignore them or that the firms behind their stocks are insignificant.
The same successes in an innovation that can be found in the biggest firms is also happening in small cap companies as well. Let’s take a look at seven such shares that are expected to double in price by 2025.
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Zai Lab Limited (ZLAB)
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Zai Lab Limited (NASDAQ:ZLAB) is one of two biopharmaceutical stocks discussed in this article. investors are well aware that this particular sector has a history of producing outsized gains. It requires vast fortunes to develop successful therapeutics but many failures result. The result is that the sector produces many busts but those that succeed rise dramatically.
Zai Lab Limited isn’t one of those firms that is chasing its initial success. Instead, the firm is relatively well established through a series of revenue streams. Yet, at the same time, the company does have a growth stream. The company launched VYGART in September 2023 and it has already seen $10 million in sales. The drug treats a rare neuromuscular condition called myasthenia gravis.
Otherwise, the company has a stable of other strong therapeutics that are growing rapidly. The result is that in 2023 overall sales increased by 25%, rising to $266.7 million. That has analysts excited and they believe that at the consensus level its price can rise above $64, well above its current $20 price.
Tandem Diabetes Care (TNDM)
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Tandem Diabetes Care (NASDAQ:TNDM) is not as clear a winner as Zai Labs Limited but there are several things to like about the firm and its stock. From a fundamental perspective Tandem Diabetes Care is not a firm that particularly stands out. Instead, its growth has been relatively flat and its losses have increased. It also has enough liquidity to continue to operate for a few years into the future without any problems.
It isn’t perfect but the company does have a few catalysts that make it potentially worthwhile for investors. Perhaps most importantly, the high analyst price is more than double its current $28 share price.
Additionally, the company recently launched the world’s smallest automated insulin delivery system called Mobi. The pump is indicated for those patients with type 1 diabetes. That’s important to note because type 2 diabetes is undergoing a shift with the introduction of drugs such as Wegovy and Zepbound. The point being that type 1 diabetes is a genetically driven disease that is uncontrollable through diet and exercise alone. Thus, demand for the Mobi delivery system is likely to be strong while also being less subject to external forces.
HighPeak Energy (HPK)
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HighPeak Energy (NASDAQ:HPK) is one of many independent oil exploration and production firms based in the United States. Those firms and their stocks look increasingly attractive as the geopolitical energy climate grows increasingly complex in 2024.
In short, U.S. oil assets are in position to become very valuable should tensions escalate globally and within the Middle East in particular. That’s part of the reason that analysts believe shares could rise as high as $34 in the next 12 months. That would more than represent a doubling above its current $15 share price.
Another reason that many are positive about the future of high peak energy is that the firm is surpassing milestones. In 2023, the company surpassed $1 billion in revenues for the first time ever. That led to free cash flow of nearly $34 million over the period.
The company’s proven reserves also increased by 25% between the end of 2022 and the end of 2023. Thus, should prices rise on geopolitical tensions, its U.S. based reserves would become that much more valuable.
Crescent Energy Corporation (CRGY)
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Crescent Energy Corporation (NYSE:CRGY) stock is interesting for many of the same reasons that HighPeak Energy, immediately above, is interesting. Both firms operate in the oil and gas E&P sector. It means they explore and produce oil and natural gas assets which are subject to the inherent volatility of commodity markets.
In short, it’s the same story here: Analysts see real potential for the stock to double in the next 12 months. The company’s assets are located within North America meaning they have the potential to become much more valuable should other global strategic resources rise in price. That will or will not happen depending upon geopolitical forces which are inherently difficult to predict.
While those catalysts remain difficult to predict, there are also fundamental reasons to believe in Crescent Energy Corporation. 4th quarter oil revenues were up suggesting that the strategic importance of U.S.-based resources is increasing. It’s also important to note that oil revenues make up the bulk of Crescent Energy Corporation’s revenues.
Schrodinger (SDGR)
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Schrodinger (NASDAQ:SDGR) is part biotech stock and part AI stock. The company continues to develop a physics-based computational platform that has utility in the drug discovery and development sector.
In order to develop a therapeutic, biotechnology firms first have to identify molecules that have the potential to treat a target disease. It’s a painstaking process that is becoming easier through the use of computers, machine learning, and artificial intelligence.
Schrodinger has emerged as a leading name in that space. The company essentially does two things. One, it licenses its technology to firms wishing to discover molecules with treatment potential. Two, the company is also currently building a portfolio of clinical and preclinical programs.
It’s easy then to see why analysts believe its shares could grow rapidly: It has an in-demand product that it can sell to firms that lack its technological know-how. Further, Schrodinger has the potential to produce a blockbuster drug of its own. Perhaps most importantly, the company grew its revenues by more than 30% during the fourth quarter.
Bumble (BMBL)
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Dating app Bumble (NASDAQ:BMBL) isn’t doing very well at the moment. That’s a big part of the reason that investors should consider buying the stock now.
Essentially, Bumble is doing better now than it did a year ago but is still falling short of Wall Street’s expectations. It forced the company to take the drastic step of reducing its workforce by 30%. That decision was made with the intention of increasing earnings while the company also undertakes an app overhaul.
The company is attempting to appeal to a younger audience akin to that of its main rival, Match (NASDAQ:MTCH). If the company can do that, it will obviously help it to increase its earnings. That, combined with the layoffs, could foreseeably spike earnings dramatically in the coming quarters. That said, Bumble is not expected to enact a rapid turnaround and the first quarter is expected to continue to be muted.
Alphatec Holdings (ATEC)
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Alphatec Holdings (NASDAQ:ATEC) is a pretty humdrum firm as far as its operations goes. It develops products and technologies used in the surgical treatment of spinal disorders. However, it’s also a fundamentally strong firm which is why its stock is so well regarded at the moment.
How well regarded is it? Well, analysts rate it a strong buy overall and its $13 shares have the potential to rise as high as $32.
The reason to believe that those analysts are right lies in its recent earnings report. That report showed that revenues increased by 37% in 2023, reaching $482 million. A big part of that growth must be due to the fact that the company trained over 500 surgeons in 2023. That amounted to a 27% increase in the number of surgeon users between 2022 and 2023. The greater the number of surgeons with familiarity with its products, the easier it will be for Alphatec Holdings to sell its products and services.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
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