MW These under-the-radar stocks combine fast growth with big upside potential
By Philip van Doorn
The companies are projected to grow sales rapidly through 2027, and many of the stocks are expected to show double-digit increases this year
Dozens of small-cap U.S. companies are expected to increase their revenue at an annual pace of more than 15% over the next two years.
A screen of small-cap stocks sheds light on companies expected to grow their businesses very rapidly. This bodes well for investors looking for multiyear growth plays. But for many of these companies, analysts expect large increases in stock prices this year.
Earlier this week, Matt Bartolini, the global head of research strategists at State Street Investment Management, made a solid case for investors to increase their exposure to small-cap stocks immediately. These stocks are trading at very low relative valuations to the S&P 500 SPX, and many smaller companies are primed for a bump in profits from declining borrowing costs and from federal income-tax breaks.
In that article we listed several ways for investors to use low-cost index funds to track small-cap stocks, such as the State Street SPDR Portfolio S&P 600 Small Cap ETF SPSM or the iShares Russell 2000 ETF IWM, along with several others.
Some investors will want to dig into individual stocks. For these we have conducted a new stock screen focusing on projected growth rates for revenue.
We began the screen with the S&P Small Cap 600 Index SML. This index is more selective in that S&P Dow Jones Indices' criteria for a company to be added to the index includes four consecutive quarters of positive net income.
Here is how we narrowed down from the initial group of 600 companies:
-- Stocks covered by at least five analysts polled by LSEG. This brought the list down to 414 companies.
-- Majority buy or equivalent ratings among the analysts: 204 companies.
-- Revenue and earnings-per-share estimates available through calendar 2027. The estimates are adjusted for companies whose fiscal reporting periods don't match the calendar. This narrowed the list to 196 companies.
-- Positive EPS estimates for 2025, 2026 and 2027: 177 companies.
Then we cut the list to 25 companies for which consensus revenue estimates project compound annual growth rates of at least 15% from 2025 through 2027.
Here is an explanation of how we set that target revenue growth rate:
It turns out that based on LSEG's "smart estimates," which remove outliers among analysts' estimates and estimates that haven't been updated or affirmed recently, the S&P Small Cap 600 Index is projected to increase revenue per share at a 4.1% CAGR from 2025 through 2027. The index estimates are weighted by the companies' market capitalization.
For the S&P MidCap 400 Index MID, the projected two-year revenue CAGR is 5.6%, while the projected two-year sales CAGR for the large-cap S&P 500 is 7.4%. So we rounded that up to 7.5% and then doubled it to 15% for our minimum revenue CAGR projection for the small-cap group.
Here is the entire list of 25 companies that passed the screen, sorted by projected revenue CAGR from 2025 through 2027:
Company Two-year estimated sales CAGR through 2027 Two-year estimated EPS CAGR through 2027 Jan. 14 price Consensus price target Implied 12-month upside potential SM Energy Co. 52.9% -4.3% $18.57 $32.25 74% TG Therapeutics Inc. 40.0% -8.7% $29.54 $44.86 52% Krystal Biotech Inc. 38.0% 21.0% $291.79 $271.09 -7% SiTime Corp. 34.5% 46.3% $349.20 $352.79 1% Beacon Financial Corp. 32.5% 40.7% $26.79 $31.33 17% Corcept Therapeutics Inc. 29.6% 81.9% $37.04 $91.00 146% StepStone Group Inc. 24.3% 22.2% $73.50 $75.14 2% Impinj Inc. 23.1% 37.5% $181.36 $241.11 33% Millrose Properties Inc. 22.5% 13.8% $30.54 $38.08 25% Vital Farms Inc. 22.2% 22.3% $29.55 $49.45 67% Agilysys Inc. 20.9% 31.0% $112.71 $139.72 24% Supernus Pharmaceuticals Inc. 19.7% 31.2% $51.80 $61.33 18% FB Financial Corp. 19.3% 14.4% $59.14 $65.17 10% TransMedics Group Inc. 19.1% 16.9% $141.96 $146.00 3% DigitalOcean Holdings Inc. 19.1% 9.3% $52.70 $54.33 3% CareTrust REIT Inc. 18.9% 8.2% $37.25 $40.70 9% Vericel Corp. 18.9% 86.9% $37.33 $55.00 47% Palomar Holdings Inc. 18.4% 12.9% $130.31 $164.75 26% Astrana Health Inc. 18.3% 94.8% $25.68 $36.89 44% Dime Community Bancshares Inc. 18.1% 30.4% $30.11 $34.50 15% Harmonic Inc. 17.8% 58.3% $9.95 $11.79 18% Cactus Inc. 17.1% 12.6% $52.00 $51.00 -2% Essential Properties Realty Trust Inc. 16.6% 5.7% $30.45 $35.76 17% Enova International Inc. 15.7% 18.0% $159.90 $184.50 15% Mirion Technologies Inc. 15.2% 20.7% $26.25 $30.50 16% Source: FactSet
Among the 25 companies, consensus price targets indicate double-digit (or better) upside potential for 18 of them over the next 12 months. However, that might be considered a relatively short period for committed investors looking at rapidly growing companies.
Click on the tickers for more about each company.
Read: Tomi Kilgore's guide to the wealth of information available for free on the MarketWatch quote page
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-Philip van Doorn
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January 15, 2026 10:31 ET (15:31 GMT)
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