5 Small-Cap Stocks With Impressive Growth and Upside Potential

Small-cap stocks, loosely defined as companies with market capitalizations up to just a few billion dollars, occupy a unique and often underappreciated corner of the market. They don’t always command headlines, and many come with higher volatility than their large-cap counterparts. Some small-caps are suited only for short-term traders because of elevated risk, inconsistent fundamentals, or reliance on single catalysts.

However, other small-caps occupy their own category—real businesses with expanding revenue, improving profitability, and strategic long-term vision. These companies often represent what dominant industry leaders once looked like at earlier stages of their growth. For investors willing to assume some risk, this segment can offer the potential for outsized returns.

Here are five small-cap stocks demonstrating impressive momentum, strengthening fundamentals, and compelling upside potential.

DLocal: Fintech Capitalizing on Emerging Markets

Uruguay-based fintech leader DLocal (NASDAQ: DLO) has been one of the more resilient small-cap growth stories of 2025. The stock is up 27% year-to-date (YTD) as of Friday’s close and continues to hold above the all-important $13 support zone. With a forward price-to-earnings ratio (P/E) of just 16.04, DLO is now edging into attractive valuation territory.

DLocal reported another standout quarter last week. Q3 revenue climbed to $282.5 million, up 52% year-over-year (YOY) and ahead of expectations, while earnings per share (EPS) of 17 cents topped estimates.

Total payment volume (TPV) surged to a record $10.4 billion, marking the fourth straight quarter of 50%+ growth. Net income nearly doubled, rising 93% YOY, and adjusted free cash flow came in at $37.6 million, up 28%.

During the earnings call, CEO Pedro Arnt emphasized that the company’s diversified payments model remains resilient, even amid regional headwinds. 

Although the net take rate declined to 0.99%—mainly due to softness in Egypt—Latin America, Asia, and other regions remained robust.

For investors, the slight pullback may be more of an opportunity than a warning sign. The long-term growth story remains intact, and the stock’s valuation is increasingly compelling. Analysts maintain a Moderate Buy rating, and with shares hovering near $13 support level, DLO stands out as a high-growth small-cap for investors with a longer horizon.

Dave Inc: A High-Growth Fintech Powering Financial Inclusion

Dave Inc. (NASDAQ: DAVE), the Los Angeles-based fintech behind the widely used Dave app, has quietly become one of the strongest-performing small-caps of 2025. The stock is up 136% YTD, driven by sustained execution and rising confidence in its consumer-focused financial platform.

Dave’s mission is to provide affordable, transparent financial tools for underserved consumers who traditional banks often overlook.

Its subscription-based model helps users avoid overdraft fees, budget more effectively, and access short-term cash when needed.

Momentum surged after the company reported blowout Q3 earnings on Nov. 4. EPS of $4.24 crushed expectations of $2.29, while revenue of $150.8 million grew 63% YOY.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) soared 137%, reflecting improving operational efficiency as the customer base expands. Management raised full-year revenue guidance to $544-$547 million and highlighted continued improvements in its Cache AI underwriting platform. 

Technically, the stock is holding support between $180 and $200, and with a forward P/E of 18.1, Dave remains reasonably valued, even after its meteoric rise.

GigaCloud Technology: A Supply Chain Cloud Leader Scaling Globally

GigaCloud Technology (NASDAQ: GCT), a $1.1 billion China-based cloud and logistics platform, has also become one of the standout small-cap performers of the year, similar to DAVE. The stock is up 64% YTD, powered by consistent earnings beats and growing recognition of its end-to-end supply chain platform for cross-border B2B e-commerce.

The company delivered a strong earnings beat on Nov. 6 with Q3 EPS of 99 cents, topping expectations by 34 cents, and revenue of $332.6 million.

The 9.7% YOY revenue growth reinforces ongoing demand for its platform, particularly among large furniture and bulky-goods exporters.

Even after its surge, GCT remains undervalued with a P/E of 9.14. From a technical perspective, the stock is consolidating in a multi-month range, and a breakout above $34 could fuel the next leg higher. 

Pagaya Technologies: AI Underwriting Transforming Consumer Credit

Pagaya Technologies (NASDAQ: PGY), a $1.8 billion AI-driven fintech, enjoyed a remarkable year of returns. Though the stock is currently down 46% from its recent 52-week high, shares are up 157% YTD due to accelerating partner adoption and continued earnings strength.

Pagaya uses AI to enhance consumer credit underwriting for banks and financial institutions, enabling better loan performance and portfolio optimization. Its platform leverages vast datasets to build predictive risk models used across credit products.

Q3 earnings on Nov. 10 were another beat. Revenue reached $350 million, adjusted EBITDA hit $107 million, and network volume climbed to $2.8 billion.

Management raised full-year revenue, EBITDA, and net income guidance, signaling confidence into 2026.

However, after a wildly impressive run-up in the stock from June to September, the stock has since pulled back 46% from its highs and is now near the 200-day SMA. With a forward P/E of 14.98 and a Moderate Buy rating, PGY may be setting up for another leg higher if a higher low confirms support between $25 and $30.

Guardian Pharmacy Services: A Scalable Leader in Long-Term Care 

Guardian Pharmacy Services (NYSE: GRDN), a $1.98 billion operator of long-term care pharmacies, continues to establish itself as a standout small-cap healthcare name. Shares are up 44% YTD, supported by strong earnings, breakouts on heavy volume, and increasing institutional attention.

Guardian provides medication management and pharmacy solutions to more than 8,200 long-term care facilities across 38 states.

With 53 pharmacies and a growing national footprint, the company is scaling rapidly within a fragmented industry.

Q3 earnings results reinforced the momentum. Revenue rose 20% YOY to $377 million, EPS came in at 25 cents, and management raised full-year revenue and EBITDA guidance. The new revenue outlook of $1.43-$1.45 billion and EBITDA guidance of $104-$106 million suggest durable growth into 2026.

The stock trades at a forward P/E of 27, a slight premium that reflects confidence in the company’s trajectory. Technically, the $27 to $30 range remains key support. A firm hold above the 5-day SMA would position the stock for continuation.

Why These Small-Cap Stocks Stand Out

Small-cap stocks are not without risk, but they also represent some of the most fertile ground for long-term upside. The five companies highlighted above show improving fundamentals, meaningful revenue growth, and expanding market opportunities—qualities that set the potential long-term winners apart from the crowd. 

In a market where volatility remains elevated and leadership continues to shift, selectively choosing high-quality small-caps with real earnings power and strategic direction can be a smart way to position for the years ahead.

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