15 Small-Cap Companies With High Growth Potential

When you invest your hard-earned money into the stock market, one of the most crucial factors to keep in mind before you buy any company is that particular investment’s ability to deliver consistent growth and sustain investor returns over the long term. There are many aspects to maintaining a long-term investing strategy, one of which is to commit to holding any stock you buy for three to five years at the very minimum.

Many of the most successful long-term investors choose a diversified approach to buying stocks, and small-cap companies are one type of investment that can generate long-term portfolio growth. In fact, some of the most popular large-cap and mega-cap stocks that continue to deliver wealth-building investor returns qualified as small-cap companies just one or two decades ago. Generally speaking, small-cap stocks are companies with market capitalizations that fall in the $300 million to $2 billion range.

It’s important to understand that not all small-cap stocks are created equal, nor do all companies that fit into this category have the catalysts and competitive advantages necessary to drive high growth.

On that note, let’s take a look at 15 small-cap companies that do have high growth potential and could make investors richer over the next few decades.

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Inovio Pharmaceuticals (NASDAQ: INO) has drawn its fair share of scrutiny in recent months as it’s lagged behind other top companies working on coronavirus vaccines.

The company expects to launch the phase 3 study for its COVID-19 vaccine candidate (INO-4800) in the second quarter. It also recently announced study findings that its vaccine “induced a robust T cell response” across the dominant variants of SARS-CoV-2, including the ones from the U.K., Brazil, and South Africa.

INO-4800 could be a source of meaningful balance sheet growth for the company if it is authorized for emergency use and eventually approved, but the time frame in which Inovio’s contribution to the vaccine race could stimulate these kinds of returns is quickly closing.

The company does have a number of other medicines in clinical trials, including for the treatment of several types of cancers and infection diseases. None of these have gained approval from the U.S. Food and Drug Administration to date. While Inovio’s revenue grew by roughly 80% in 2020, its net losses totaled a staggering $166 million.

Still, Inovio could turn things around on the coronavirus vaccine front, and its pending pipeline of medicines could also drive significant growth in the future. In addition, analysts’ consensus price targets estimate the stock still has an upside of more than 100%. Inovio is not a stock for the risk-averse, but investors with a higher tolerance for risk could still see some notable portfolio growth from this company over the next few years.

ALSO READ: 3 Compelling Small-Cap Stocks With Big-Cap Potential

Jushi Holdings (OTC: JUSHF) is a small-cap marijuana stock that has managed to avoid much of the market’s volatility over the past year and continue delivering exceptional shareholder returns. In fact, the stock has gained approximately 680% over the trailing 12 months.

Jushi Holdings boasts a stable of brands that sell everything from vape products to edibles. The multistate cannabis operator currently has more than a dozen dispensary locations open across the U.S. and is quickly expanding its national footprint. In the first week of May alone, Jushi announced it had closed acquisitions of two retail dispensaries in California and a 93,000-square-foot facility in Virginia.

Jushi’s revenue grew by nearly 700% in 2020, while its gross profits surged 760%. The company has proven its ability to capitalize on both the recreational and medical cannabis boom. This pot stock has plenty of upside potential left to pursue, and it may not be long before Jushi Holdings outgrows its small-cap title.

Seritage Growth Properties (NYSE: SRG) is a real estate investment trust (REIT). Its portfolio consists of shopping center spaces that were formerly inhabited by Sears and Kmart stores. At the time of this writing, the REIT boasts nearly 200 properties located in 41 different states and Puerto Rico.

Profitability has been a distinct challenge for Seritage Growth Properties since its creation in 2015. The COVID-19 pandemic hasn’t helped matters, either. But Seritage’s first-quarter 2021 financial results showed signs of life. Despite funds from operations (FFO) going into negative territory, its net operating income (NOI) rose 9% quarter over quarter, and the REIT collected 97% of rent and recoverable expenses owed during the three-month period.

In the first-quarter report, CEO Andrea Olshan said, “This quarter marks the beginning of a new chapter at Seritage. After our asset-by-asset review, we’ve taken an important step towards this goal by restructuring our team to better align our human capital and processes. Now we have turned our attention to executing on our asset plans in a thoughtful manner that will preserve our flexible capital structure and maximize our value creation opportunities.”

As Seritage implements its long-term redevelopment strategy to turn these former Sears and Kmart stores into profitable, up-to-date assets, the REIT’s balance sheet and share price could surge in kind. This under-the-radar stock still poses a compelling buy for long-term investors who have the patience and risk tolerance to withstand the near-term headwinds it faces at the moment.

Information technology company Unisys (NYSE: UIS) provides a wide range of offerings ranging from digital workplace services to cloud and infrastructure solutions. Although the company has been in business for well over three decades, it still qualifies as a small-cap stock with a market capitalization of about $1.6 billion. Although the company trades for just around $20 per share, the stock has gained considerable steam over the past year. It’s up by an astonishing 120% from where it was trading just 12 months ago.

The company’s first-quarter 2021 revenue declined by a slim 1.1% from the year-ago period, but its operating profits and adjusted EBITDA rose by respective rates of 117% and 30%. Unisys also boosted its operating cash flow by $335 million compared with the year-ago quarter. And despite the slight revenue decline Unisys reported in the first quarter, its cloud and infrastructure segment saw notable revenue growth of roughly 19% during the three-month period.

Updated high price targets from analysts estimate that Unisys has a roughly 70% upside, which could translate to some impressive portfolio growth for existing shareholders in the upcoming year and beyond.

ALSO READ: 2 Top Small-Cap Stocks to Buy in May

Conglomerate Boston Omaha (NASDAQ: BOMN) has a diversified array of businesses in its stable. These include advertising entity Link Media Outdoor; a national homebuilding company called Dream Finders Homes; and General Indemnity Group, a surety insurance company with members in all 50 states and the District of Columbia. Boston Omaha’s reach also extends to an array of other business sectors, including broadband telecommunications services and even banking.

Boston Omaha reported 11% total revenue growth in 2020 and closed the year with approximately $510 million in total assets and $100 million in total liabilities. It also concluded the year with $5.6 million in cash from operations on its balance sheet.

The company has plenty of growth potential left to explore. Its performance in 2020 showed its innate ability to resist the ups and downs in the broader market during times of economic crisis, which makes it a decidedly recession-resilient buy for long-term investors.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

BellRing Brands (NYSE: BRBR) makes a wide range of nutrition food products, and its family of brands include names like Premier Protein and PowerBar. The company boasts a market capitalization of just $1 billion, and there’s plenty of upside potential left for it to explore in the multibillion-dollar global nutrition industry.

The company released its financial results for the second quarter of fiscal 2021 (ended March 31) on May 6. During the quarter, BellRing Brands reported 10% net sales growth on a year-over-year basis. In addition, its net sales for the first half of the company’s fiscal 2021 represented 13% growth from the same period in fiscal 2020.

Furniture retailer Lovesac (NASDAQ: LOVE) is known for its modular sectional couches and beanbag “Sacs.” Shares of the company have risen 450% over the trailing 12 months and shot up 30% in the month of April alone.

In the company’s fiscal 2021 (which ended on Jan. 31), it reported 37% net sales growth and 53% comparable sales growth. Lovesac also reported a strong surge in online shopping for its products in its fiscal 2021, with internet sales spiking 171% from fiscal 2020. Its gross profits also increased by a whopping 50% in fiscal 2021.

Lovesac closed the fiscal year with $78 million in cash and cash equivalents on its balance sheet, and absolutely no outstanding debt on its current credit line.

Median analyst price targets estimate that Lovesac could hit $85 per share in the next 12 months alone, which would represent an upside of 18% from where the stock is currently trading.

ALSO READ: 3 Top Small-Cap Stocks to Buy Right Now

Factual content streaming company CuriosityStream (NASDAQ: CURI) has proven to be a highly resilient investment amid the market tumult of the past year. The company has seen its shares gain 30% since last May, and it reported a strong year of growth in 2020.

CuriosityStream’s full-year revenue surged 120%, while its revenue in the fourth quarter represented a 70% upswing from the year-ago period. At the close of the year, the company reported a 50% increase in its subscriber base compared with the same stretch in the prior year.

The global media streaming market is anticipated to expand at a compound annual growth rate (CAGR) of 23% in the 2020-2025 period. CuriosityStream’s focus on the unique subniche of educational content primes it for untold expansion in this incredibly fast-paced, high-growth market sector.

Management is already targeting 80% revenue growth for the full-year 2021 alone.

B&G Foods (NYSE: BGS) could soon become a mid-cap stock, with a current market capitalization of $1.9 billion. The company also pays a hefty dividend. At the time of this writing, the stock boasts a robust dividend yield of 6.5%.

Business was booming in 2020 on the heels of high demand for its portfolio of familiar branded products (think Cream of Wheat, Clabber Girl, Green Giant, and Crisco).

As a result, the food company reported a 19% spike in net sales while its net income surged 73%. Furthermore, adjusted EBITDA marked a double-digit increase of 19%.

Biotechnology company Vaxart (NASDAQ: VXRT) is working on several oral coronavirus vaccine candidates. An oral COVID-19 vaccine could be a significant game changer in the global fight against this disease, and Vaxart is making slow but steady progress to achieve this goal.

The company’s most advanced oral coronavirus vaccine candidate thus far is called VXA-CoV2-1. Vaxart released new phase 1 study data about it on May 3, stating that the candidate “induced higher CD8+ T-Cell responses” when compared with either the Pfizer or Moderna vaccines. Vaxart is expecting to launch its phase 2 study of the oral COVID-19 vaccine candidate by the middle of this year.

Vaxart’s current pipeline also includes an array of other promising oral vaccine candidates, including one for norovirus, which it intends to study in four separate clinical trials in 2021. Despite the fact that norovirus is a highly infectious disease that the Centers for Disease Control and Prevention says afflicts close to 700 million individuals worldwide every year, there is currently no approved vaccine for the illness. This presents a broad market opportunity for Vaxart, and approval could mean blockbuster revenue for the company.

Vaxart’s revenue declined on a year-over-year basis in the first quarter of 2021, and the company reported net losses to the tune of $16 million. The stock isn’t without its fair share of risk, but investors who pair it with more conservative investments could see rapid portfolio gains over the next few years if Vaxart’s top vaccine candidates win approvals.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Cannabis company Harvest Health & Recreation (OTC: HRVSF) owns and operates several brands, as well as dispensary locations in the states of Arizona, California, Florida, Maryland, and Pennsylvania. The company’s diversification into both the medical and recreational sectors of the broader cannabis market are driving strong balance sheet returns even as marijuana legalization is still widely mixed across the U.S.

The pot stock grew its revenue by 98% in the full-year 2020, and its gross profits by an astonishing 150%. And whereas its adjusted EBITDA was still in negative territory in 2019, Harvest Health turned this metric positive in 2020 for a total of $15.3 million.

Management is targeting approximately 64% revenue growth for 2021.

ALSO READ: 2 Top Pot Stocks to Buy Right Now

Online insurance marketplace EverQuote (NASDAQ: EVER) serves a wide array of insurance needs, including home, life, auto, and renters insurance. The company’s total revenue grew 40% in 2020, with revenue derived from its auto insurance vertical soaring 33% and revenue across its other insurance offerings spiking 74%.

EverQuote has already started 2021 on a high note, reporting 28% total revenue growth in the first quarter of the year. In addition, its auto insurance vertical revenue and other insurance revenue rose by respective amounts of 25% and 41%. Management is also forecasting double-digit revenue growth for the full year.

Planet 13 Holdings (OTC: PLNH.F) is based in Nevada. While it has just one retail location open at present, the store is a massive cannabis dispensary that has been called “the largest cannabis entertainment complex” in the world. The company is also in the process of building a second cannabis entertainment complex in Santa Ana, California.

Planet 13 Holdings reported 22% revenue growth in the final quarter of 2020 and 11% revenue growth for the full year. The company said that during the fourth quarter, its revenue constituted more than 8% of all marijuana dispensary revenue generated in the entire state. And in April, just a few months into the company’s fiscal 2021, the company reported record sales to the tune of $10.7 million.

Bear in mind, marjuana is legalized for both medical and recreational use in Nevada, as well as in California, where the company is building its new store complex. These two markets alone can continue to produce substantial balance sheet growth for Planet 13 Holdings in the coming years, and shareholders can reap the rewards of its growth trajectory.

Shares of online pet pharmacy PetMed Express (NASDAQ: PETS) haven’t moved much over the past year, but the company’s balance sheet and dividends have continued to grow. The company’s dividend yields 4% based on current share prices, and management just announced a boost to its quarterly dividend from $0.28 to $0.30 per share on May 3.

PetMed’s fiscal year 2021 ended on March 31. During the 12-month period, its net sales increased by 9% while its net income hit a double-digit growth rate of 18% and reorder sales went up 10% year over year. The company also grew its customer base by nearly a half-million individuals in fiscal 2021.

ALSO READ: Love Your Pets? Buy and Hold This Growth Stock for Life, Too

Canadian pot stock OrganiGram Holdings (NASDAQ: OGI) owns several adult recreational cannabis brands. Its main production and cultivation facility is in the province of New Brunswick. The company also has a presence in the province of Manitoba, where its recently acquired soft-chew manufacturer The Edibles & Infusions Corporation is located.

In the company's most recent financial report for the second quarter of fiscal 2021 (ended Feb. 28), industry headwinds and business changes due to the coronavirus pandemic saw both OrganiGram’s net and gross revenues dip into negative waters.

Volatility is common in the world of pot stocks. This is particularly true of many companies operating in the Canadian marijuana market. As OrganiGram grows its business, its upside potential should also expand. That said, the stock is likely a more appropriate buy for the risk-tolerant investor.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Although the stock market has had its fair share of ups and downs over the past year, prime buying opportunities still abound for long-term investors. There’s no magic formula when it comes to investing in the stock market. However, a long-term mindset and a strategy of diversification coupled with consistency and patience can help you to achieve and sustain optimal portfolio growth throughout your investing journey and into retirement.

Rachel Warren has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Boston Omaha Corporation, CuriosityStream Inc., Jushi Holdings, OrganiGram Holdings, Planet 13 Holdings Inc., and Seritage Growth Properties (Class A). The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.