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3 Small-Cap Stocks That Could Soar by 40% or Higher According to Wall Street

While concerns over rising inflation and resurgence of COVID-19 cases are keeping the stock market volatile, the major stock market indexes are hovering near their all-time highs on several positive factors. As the low-interest-rate environment is not expected to change anytime soon, quality small-cap stocks Harmony Biosciences (HRMY), Tupperware (TUP), and Thryv (THRY) should deliver solid returns in the upcoming months. Wall Street analysts expect these three stocks to rally by more than 40% in the near term.

The resurgence of the COVID-19 cases and high inflation has worried investors about the pace of the global economic recovery. In addition, consumer confidence fell to a six-month low in August. However, Federal Reserve Chair Jerome Powell reiterated that high inflation is ‘temporary.’ The major stock market indexes rallied over the past week on the Fed’s dovish comments related to its tapering activities.

In addition, the economy has witnessed a substantial decline in the unemployment rate recently. Against this backdrop, the prospects for small-cap stocks look promising.

Harmony Biosciences Holdings, Inc. (HRMY), Tupperware Brands Corporation (TUP), and Thryv Holdings, Inc. (THRY) have gained significantly over the past few months and have plenty of upsides left given the favorable backdrop. Wall Street analysts expect these stocks to rally by more than 40% in the near term. So, it could be wise to bet on them now.

Harmony Biosciences Holdings, Inc. (HRMY)

Commercial-stage pharmaceutical company HRMY develops and commercializes therapies for patients with rare neurological disorders. Its product, WAKIX, is a medication used to treat excessive daytime sleepiness in adult patients with narcolepsy. It has a market capitalization of $2.06 billion.

On August 10, 2021, HRMY and Blackstone (BX) announced entering into a strategic financing collaboration. John C. Jacobs, HRMY’s President, and CEO said, "This financing provides us with further flexibility to grow our business by providing us with access to capital to expand our portfolio of assets in rare, neurological diseases while also reducing our annual interest expense."

HRMY’s net product revenue increased 94.2% year-over-year to $73.82 million for the second quarter ended June 30, 2021. Its adjusted EBITDA grew 214.6% year-over-year to $28.04 million, while its adjusted net income increased 221.3% year-over-year to $31.87 million. In addition, its adjusted EPS came in at $0.54 compared to a loss per share of $0.07 in the prior year period.

HRMY’s EPS is expected to increase 385.7% year-over-year to $1.02 in fiscal 2021. The company’s revenue is expected to increase 101.9% year-over-year to $80.90 million for the quarter ending September 30, 2021.

Over the past year, the stock has gained 33% to close Friday’s trading session at $36.15. Wall Street analysts expect the stock to hit $56.50 in the near term, which indicates a potential upside of 56.3%.

HRMY’s POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

The stock has an A grade for Growth and Sentiment, and a B grade for Value and Quality. Within the Medical - Pharmaceuticals industry, it is ranked #12 of 217 stocks. Click here to see the additional POWR Ratings for HRMY (Stability and Momentum).

Tupperware Brands Corporation (TUP)

TUP operates as a consumer products company and has a market capitalization of $1.18 billion. The company manufactures, markets, and sells design-centric preparation, storage, and serving solutions for the kitchen and home, as well as an array of products for on-the-go consumers under the Tupperware brand name.

On June 22, 2021, TUP announced the prepayment of $58 million of its term loan debt from Angelo Gordon and JP Morgan (JPM) and that its Board of Directors has authorized share repurchases of up to $250 million of the company's outstanding shares of common stock. Sandra Harris, TUP’s CFO and COO, said, "The ongoing success of our Turnaround Plan has resulted in the Company's improved liquidity position over the past 18 months enabling us to prepay $58 million of the outstanding term loan."

TUP’s net sales increased 17% year-over-year to $464.70 million for the fiscal second quarter ended June 26, 2021. Its adjusted EBITDA grew 17% year-over-year to $95.30 million, while its adjusted net income increased 21.9% year-over-year to $50.60 million. Also, its adjusted EPS came in at $0.95, up 13.1% year-over-year.

Analysts expect TUP’s EPS to increase 45.1% year-over-year to $3.25 in fiscal 2021. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters. The company’s revenue is expected to increase 32.8% year-over-year to $481.63 million for the quarter ending September 30, 2021.

The stock has gained 11.9% over the past month to close Friday’s trading session at $23.76. Wall Street analysts expect the stock to hit $41.50 in the near term, which indicates a potential upside of 74.7%.

TUP’s POWR Ratings reflect solid prospects. The company has an overall rating of B, which translates to a Buy in our proprietary rating system. In addition, it has an A grade for Quality, and a B grade for Value.

Click here to see the additional POWR Ratings for TUP (Growth, Stability, Sentiment, and Momentum). Also, TUP is ranked #17 of 64 stocks in the B-rated Home Improvement & Goods industry.

Thryv Holdings, Inc. (THRY)

With a market capitalization of $1.06 billion, THRY provides digital marketing solutions and cloud-based tools to small-to-medium-sized businesses in the United States. The company operates through three segments: SaaS, Marketing Services, and Thryv International.

THRY has expanded its offering by launching free online tools for growing small business owners on July 22, 2021. Ryan Cantor, THRY’s VP of Product and Marketing, said, “These tools not only help in their day-to-day activity but give them insight into how they are perceived by current and potential customers, and how they can improve everything from their invoices to their websites.”

THRY’s U.S. SaaS revenue increased 32.3% year-over-year to $41.40 million for the fiscal second quarter ended June 30, 2021. Its total assets grew 16.2% sequentially to $1.41 billion. Its net income increased 112.5% year-over-year to $24.36 million. Also, its EPS came in at $0.66, up 94.1% year-over-year.

For fiscal 2022, analysts expect THRY’s EPS to increase 43% year-over-year to $2.46. Over the past year, the stock has gained 436.4% to close Friday’s trading session at $31.46. Wall Street analysts expect the stock to hit $44.33 in the near term, which indicates a potential upside of 40.9%.

THRY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has an A grade for Value.

We also have graded THRY for Growth, Momentum, Quality, Sentiment, and Stability. Click here to access all of THRY’s ratings. THRY is ranked #11 of 60 stocks in the Software - Business industry.

 


HRMY shares were trading at $38.04 per share on Tuesday afternoon, up $1.89 (+5.23%). Year-to-date, HRMY has gained 5.23%, versus a 21.77% rise in the benchmark S&P 500 index during the same period.



About the Author: Nimesh Jaiswal

Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.

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