Best Small-Cap Stocks: The Large capitalization S&P 500 Index is down more than 16% in 2022, while the Russell 2000 Small Cap Index is down approximately 20%.
Small-cap stocks performed better than historically large-cap stocks during economic expansion and bad monetary policy. Unfortunately, US GDP growth fell to negative territory in the first quarter, and the Federal Reserve is expected to sharply raise interest rates in the coming months.
These conditions make the small-cap stock selection even more important. Here are nine of the best small-cap growth stocks to buy in 2022, according to RBC Capital Markets analysts.
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Best Small-Cap Stocks To Buy In 2022
9 Best Small-Cap Stocks To Buy In 2022: S&P 500
These Are The 9 Best Small-Cap Stocks To Buy In 2022:
Coursera Inc. (Ticker: COUR)
Best Small-Cap Stocks: Coursera is an online learning platform that provides users worldwide with access to courses and degrees from universities and institutes.
According to researcher Rishi Jaluria, Coursera’s multi-segment business model, which targets consumers, companies, and higher education institutions, creates a powerful flywheel. In addition, he says Coursera customers and partners provide very positive feedback on their experiences.
Epidemiology has irreversibly transformed attitudes about education, and created the space for many to offer a completely online degree, says Jaluria.
He says Coursera will sustain top growth and expand the margins over time. RBC has a “best” rating for the COUR stock and a $ 50 price target, with a May 10 closing price of $ 15.28.
OptimizeRx Corp. (OPRX)
Best Small-Cap Stocks: OptimizeRx is a healthcare technology company that specializes in digital health messaging through electronic health recordings, helping pharmaceutical companies communicate with healthcare providers.
According to analyst Sean Dodge, OptimizeRX will have several revenue growth drivers in the coming years, including a greater focus on the pharmaceutical companies’ digital spending, and deeper integration of OptimizeRX solutions into the customer’s business plan, and a transition to more enterprise-type engagement and cross-sales opportunities.
The company’s current customer base. Dodge plans to achieve at least 30% joint annual revenue growth for OptimizeRx over the next three years. RBC has an “excellent” rating and a $ 100 price target for OPRX shares, which closed at $ 23.89 on May 10.
Global Blood Therapeutics Inc. (GPT)
Best Small-Cap Stocks: Global Blood Therapeutics is an early commercial-level biopharmaceutical company focusing on sickle cell disease or SCD.
Global Blood’s Food and Drug Administration-Approved Sickle Hemoglobin Polymerization Inhibitor Oxfrita, researcher Gregory Reynolds says he can address the needs of SCD patients without the need for donors for hematopoietic stem cell transplant surgery.
Renza says Oxbryta has the potential to become the standard care provider for SCD based on its long-term performance and safety profile, and he says the expansion of the label for children and international geography will be a motivating stimulus for global blood.
RBC has a “best” rating and a $ 65 price target for GBT stock, which closed at $ 24.22 on May 10.
Fluence Energy Inc. (FLNC)
Best Small-Cap Stocks: Fluence Energy is a leading global energy-saving technology and service company. Shares of Fluence have fallen more than 70% to date due to market expectations for sharply rising interest rates, but analyst Shelby Tucker says Fluence has the potential to generate tremendous value over time from its largest addressable market.
According to Tucker, Fluence has an impressive project backlog, but delays will weigh on the margins shortly. Tucker says logistics issues will decline in the second half of 2022, leading to approximately 50% annual revenue growth by 2025. RBC set a $ 28 price target for FLNC stock and closed at $ 8.24 on May 10.
Sannova Energy International Inc. (NOVA)
Best Small-Cap Stocks: Sunnova Energy is a leading US residential solar service provider. Analyst Elvira Scotto says Sunnova currently has a 4% to 5% share of the U.S. residential roof solar market, but that share is growing.
If Sannova is the dealer model then its dealers are generating leads and fully installing Sannova systems. U.S. Wood McKenzie estimates that roof solar penetration is only about 4%, which creates the opportunity for significant long-term growth.
Finally, according to Scott, the latest extension of the investment tax credit for roof solar panels is suitable for Sannova. RBC has a “best” rating for NOVA stock and a $ 40 price target, with a May 10 closing price of $ 15.17.
Sarepta Therapeutics Inc. (SRPT)
Best Small-Cap Stocks: Sarepta Therapeutics is a biopharmaceutical company that develops genetic therapies to treat Duchenne tendon degeneration or TMD and limb curdle tendon dystrophy or LGMT.
According to researcher Brian Abraham, both Sarepta’s TMD and LGMT gene therapy programs promote strong exposure, strong safety data, and functional gains.
He says both treatments may be best-in-class treatments for their respective disorders. In addition to its gene therapy programs, Sarepta has a strong balance sheet and is FDA-approved for the use of Exantis 51, Viontis 53, and Amontis 45 to treat specific DMT subgroups.
RBC has a “performance” rating and a $ 145 price target for the SRPT stock, which closed at $ 65.42 on May 10.
Flywire Corp. (FLYW)
Best Small-Cap Stocks: Flywire is a global payment processing software company. According to researcher Daniel Berlin, the flywheel is uniquely positioned to address payment “friction points” in education, healthcare, travel, and other industries.
Berlin says emerging end markets, market share gains, increased retention rates, and expansion in new verticals and products will boost Flywire’s annual revenue growth of at least 30% over the next three years.
He predicts that Flywire will become profitable in fiscal 2023 based on interest, taxes, depreciation, and debt repayment-based returns. RBC has a $ 51 rating and a $ 51 price target for FLYW shares, closing at $ 21.14 on May 10.
Flywire Corp. (FLYW)
Shift4 Payments Inc. (Four)
Best Small-Cap Stocks: Shift4 Payments is an integrated payment processing and technology solutions company. According to Berlin, Shift4 exposes the secular growth market for digital payments to investors.
In addition, Shift4 has a compelling mix-and-match opportunity to convert its existing gateway-only clients into end-to-end processing clients, he says, which could increase profits by more than 400%.
Shift4 has a unique distribution model through which almost all sales are generated through its software partner network, enhancing the expertise and relationships of over 7,000 software partners.
RBC has a “very good” rating and a $ 86 price target for FOUR shares that closed at $ 41.02 on May 10.
Goosehead Insurance Inc. (GSHD)
Best Small-Cap Stocks: Goosehead Insurance is an innovative personal insurance broker. Goosehead’s fully integrated sales and service platform distinguishes the company from independent insurance agents and generates cost and performance benefits, says analyst Mark Dowell.
Dowell says Goosehead is on a steady growth trajectory and should generate at least 30% annual revenue growth under normal market conditions for at least the next three years.
In addition, pricing and platform expansion will help boost earnings, and he is positive about Goosehead’s cash flow formation and continued revenue visibility. RBC has a “special” rating for the GSHD stock, which closed at $ 51.35 on May 10, and a $ 140 price target.
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