3 Small Cap Stocks with 2X Growth Potential
6 mins read

3 Small Cap Stocks with 2X Growth Potential

Small-cap stocks, typically valued at between $300 million and $2 billion, often promise significant growth potential and better long-term returns. With interest rates now on the horizon, investors are speculating on which high-growth small-cap stocks could do well. Unlike their larger counterparts, small-caps have trouble securing cash and may have to resort to more expensive loans, potentially stifling growth. However, a potential drop in interest rates could open up significant growth opportunities, especially for overlooked small-caps that have yet to catch investors’ attention.

The Federal Reserve’s higher-for-long interest rate policy has hit small-cap companies hard. Russell 2000 The index, a benchmark for small-cap stocks, has remained almost unchanged since the beginning of the year (Every year). In contrast, S&P500 AND Nasdaq100 up 16% and 20%, respectively. But this decline in small caps could present a buying opportunity for long-term investors. Today, we’re highlighting three high-growth small cap stocks that could potentially become standout performers, hidden gems for savvy investors.

ChargePoint Holdings (CHPT)

3 Small Cap Stocks with 2X Growth Potential

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We begin our exploration of small-cap, high-growth stocks with ChargePoint Estates (NYSE:CHPT), a leader in electric vehicle (EV) charging technology. Positioned to benefit from the rapid expansion of the EV market, ChargePoint is poised for explosive growth as 70% of U.S. drivers consider purchasing an EV.

Despite an 18% year-on-year increase (A year ago) revenue declines to $107.0 million in fiscal first-quarter 2025, ChargePoint’s financial position remains solid. It has $292.3 million in cash and equivalents, an undrawn credit facility of $150 million and no debt maturities until 2028. The company also improved its net loss per share to 17 cents from 23 cents in the prior year.

Meanwhile, management’s revenue guidance of $108 million to $118 million fell short of broader economic challenges. However, a strategic partnership with LG Electronics and cooperation with Porsche Cars North America (PCNA), which aims to expand its network of charging points to over 100,000 in North America, strengthens ChargePoint’s position in the market.

CHPT stock is down 29% this year. Analysts have set a bullish 12-month median target of $2.75 for CHPT stock, suggesting more than 70% potential upside. In other words, ChargePoint These stocks represent an interesting option for growth-oriented, small-cap investors whose portfolios can handle short-term volatility.

Science (EXAI)

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UK based biotechnology company Science (NASDAQ:Lecture) is the second name in our high-growth small cap stocks. It is at the forefront of artificial intelligence (Artificial intelligence) healthcare stocks across the Atlantic. Exscientia’s AI platform accelerates drug discovery and development by using machine learning to analyze medical data, allowing Exscientia to capitalize on the rapidly evolving field of AI-enabled drug discovery.

Exscientia, like many pre-revenue companies, doesn’t report earnings yet. It focuses on growing its pipeline and partnering with pharmaceutical giants. However, its last earnings report for the first quarter in May 2024 showed revenues of $6.7 million, down slightly year over year. Net loss per share fell to 21 cents from 39 cents as a result of a significant reduction in operating cash burn.

Exscientia has established strategic alliances with major pharmaceutical players to accelerate drug discovery. Collaborations with pharmaceutical giants such as the Swiss company Roche (OTCMKTS:RHHBY) and based in Germany Bayer (OTCMKTS:BAYRY) could potentially validate its AI platform and provide access to expertise and funding. These partnerships could also mean upfront payments and potential milestone payments based on successful drug development. So this network of partnerships is key for Exscientia to translate its AI technology into commercially viable treatments.

EXAI stock is down 16% YTD since January. However, the 12-month median price forecast for EXAI is $9.00, suggesting a 67% upside potential from current levels.

Viridian Therapy (VRDN)

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As we wrap up our discussion on small-cap and high-growth stocks, let’s take a closer look at them Viridian Therapy (NASDAQ:VRDN). Investors are paying attention to this biopharmaceutical company because of its development work, such as VRDN-001, an investigational drug that is primarily intended to treat thyroid eye disease (TO RAW).

In its latest earnings report, Viridian reported a net loss of 79 cents per diluted share, an improvement from a loss of $1.61 reported during the same period last year. Viridian also maintains $613.2 million in cash and equivalents, providing financing through the second half of 2026.

In 2024, Viridian faced challenges related to market dynamics and security concerns related to the biotech giant Amgen (NASDAQ:AMGN) Tepezza, a similar treatment for TED. Post-approval safety and efficacy concerns for Tepezza have weighed on VRDN stock. Nevertheless, Viridian remains optimistic as it continues to seek FDA approval for VRDN-001 by 2026 and continues to progress its Phase 3 study of VRDN-003 in chronic TED as planned.

VRDN stock has been under pressure since the beginning of the year, with its price down over 43% YTD. Nevertheless, Wall Street remains bullish, with a median 12-month price forecast of $34.00. This implies over 175% upside potential for Viridian stock. If you can handle the volatility, we think VRDN stock deserves consideration as a small-cap, high-growth stock.

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Read more:Penny Stocks — How to make money without getting scammed

As of the date of publication, Tezcan Gecgil did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are the author’s own, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication of this article, the editor in charge did not hold (directly or indirectly) any interests in the securities referred to in this article.

Tezcan Gecgil, Ph.D., joined InvestorPlace in 2018. She has over 20 years of experience in the U.S. and the U.K. and has completed all 3 levels of the Chartered Market Technician (CMT) exam. She has publicly contributed to investing.com and the U.K.’s The Motley Fool.