3 Small-Cap Stocks With Substantial Growth Potential fo 2024

Muslim Farooque

Wed, Dec 20, 2023, 5:12 PM 4 min read

Investing in small-cap stocks with growth potential is for those looking to leverage the potential of young companies on the cusp of substantial growth. Often, these stocks are uncharted but brim with potential. Further, their appeal is underlined by the U.S. economy’s robust performance. It showed an annualized expansion of 4.9% in the third quarter of 2023 and a 4% growth in consumer spending.

And, despite moderate performance 2023’s first half, where these stocks trailed behind the S&P 500 and the Nasdaq Composite, small-cap stocks are catching up. The Russell 2000, tracking U.S. small-cap stocks, reported modest gains. But, recent trends suggest a rising tide.

Moreover, the select small-cap stocks embody financial resilience and forward-thinking objectives. They are well-positioned to withstand economic fluctuations. Also, they are gearing up for substantial returns as early as 2024. Hence, they offer stability and growth, making them compelling choices for discerning investors.

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Talkspace

The Talkspace (TALK) logo is displayed on a smartphone screen.

Source: Ben__Stevens / Shutterstock.com

New York-based Talkspace (NASDAQ:TALK) harnesses the growing demand for mental health services. It offers an online platform linking patients with therapists.

With a significant 300% increase in share price year to date (YTD), it shows encouraging financials. Importantly, the rise in employer-provided mental health benefits boosts TALK’s performance.

The company’s latest quarter earnings reinforce this growth narrative. It showcases a robust 32% revenue surge and a net loss reduction by an impressive 75% to $4 million year-over-year (YOY). Also, its performance continues to shine in the payor and B2B sectors, where revenue has jumped by 132% and 79%, respectively, indicating strong market traction.

Outshining its peers, Talkspace’s YOY revenue growth of 16.35% towers over the sector median of 6.21% by a staggering 163.36%. With analysts from TipRanks assigning a moderate buy rating and betting on a robust 108% upside, Talkspace presents itself as a compelling small-cap stock. It has demonstrated its strength and is poised for long-term growth in line with mental health needs.

Bitfarms (BITF)

Source: PHOTOCREO Michal Bednarek / Shutterstock.com

Next, Bitfarms (NASDAQ:BITF) navigates an exciting path with strategic infrastructure investments.

Specifically, they are aimed at amplifying its mining capabilities ahead of Bitcoin’s anticipated halving event in April 2024. Already, its proactive expansion strategy has yielded a formidable operational hash rate of 6.3 exahashes per second (EH/s) as of November.

Moreover, the company’s robust financial standing fuels an aggressive push to expand mining capacity. By the second half of 2024, Bitfarms expects to hit an impressive 17 EH/s due to the acquisition of 35,888 Bitmain T21 miners. This signals a 63% surge in operating capacity and a 29% improvement in fleet efficiency.

Reflecting its operational success and market confidence, Bitfarms’ stock has skyrocketed by 554% YTD. And, latest earnings showcase a $34.6 million revenue, marking a 4% YOY increase. Also, November saw the firm earn 392 Bitcoins to boost its end-of-month operational hash rate to 6.4 exahashes per second. Clearly, this underscores its robust performance and bullish market stance.

ACM Research (ACMR)

a magnifying glass enlarges the ACM logo on a website

Source: Pavel Kapysh / Shutterstock.com

Finally, ACM Research (NASDAQ:ACMR), specializing in advanced wafer cleaning for semiconductors, has seen its stock surge 92.6% YTD. The company is expanding, securing a deal with a major U.S. manufacturer to diversify its revenue and strengthen its U.S. market presence.

So, this strategy aims to distribute risk and enhance stock value. With purchasing land in South Korea this year, ACM is well-placed to serve an expanding customer base.

Moreover, the company presents a compelling case with a market cap of just over $1 billion, coupled with a notable YOY revenue rise of 26.07% and a net income boost of 22.26%. Their total shipments soaring by 31% to $213 million further solidifies their growth trajectory.

Looking ahead, ACMR’s specialized equipment places it at the forefront of an industry with strong growth trends. TipRanks analysts rate ACM Research as a strong buy, forecasting a 34.02% upside, indicating that its unique technology is expected to drive the stock to new heights.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.