Small-cap stocks are currently on a rampage, seizing opportunities after a long period of stagnation driven by the hawkish Federal Reserve. These stocks are known for their wild nature and typically attract those with a higher risk appetite. Many small-cap stocks have the potential to blossom over time, often flying under the radar and giving investors a chance to get in early.
Direct Digital DRCT: A Caged Lion Unleashed
Direct Digital, currently ranked #1 (Strong Buy) by Zacks, unites state-of-the-art advertising platforms, witnessing an explosive surge in earnings expectations. The company outperformed its latest release, surpassing the Zacks Consensus EPS Estimate by a staggering 360% and posting revenue 75% ahead of consensus. Its relentless sales growth of 130% year-over-year and the forecasted earnings leap of 76% in FY23 and an additional 90% in FY24 fuel its journey towards all-time highs.
Carrols Restaurant Group TAST: The Red-Hot Flame Grills Higher
Carrols Restaurant Group, also enjoying a Zacks Rank #1 (Strong Buy), takes pride in owning and operating over 1,000 restaurants. With its earnings estimate surging by over 200% and exceeding the Zacks Consensus EPS Estimate by nearly 130%, the company is on a solid growth trajectory. Its promising forecast of a 160% earnings surge and 9% higher sales in FY23 adds further zest to its sizzling story.
Comtech Telecommunications CMTL: A Phoenix Rising from the Ashes
Comtech Telecommunications, rated as Zacks Rank #2 (Buy), crafts innovative products and services for advanced communications solutions. Like a rising phoenix, it posted a 61% beat relative to the Zacks Consensus EPS Estimate and reported sales 6% ahead of consensus. With its earnings anticipated to soar by 100% on 15% higher sales in FY23, Comtech is ahead of its game.
Bottom Line: Taming the Wild Beasts
Small-cap stocks may be wild and untamed, but they hold tremendous growth potential. Stocks like Direct Digital, Carrols Restaurant Group, and Comtech Telecommunications have compelling growth stories and improved earnings outlooks.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
