5 Small Cap Stocks That Are Diamonds in the Rough

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Small cap stocks have a market capitalization between $300 million and $2 billion. These stocks are often mistakenly viewed as risky and speculative. However, small cap stocks are the best way for investors to enter the market cheaply and without having to worry about not having enough knowledge.

Small cap stocks have the potential to outperform large cap stocks as they tend to be more nimble and flexible in their business models. This is because they have to compete with larger and better-known companies, so they must be able to adapt quickly if there is a change in the market or in the company’s industry.

The most important thing for small caps is that they must have strong fundamentals – which means they must have good financials, sustainable income streams and low levels of leverage – so that investors can trust them.

If you are willing to take risks, the following companies are worth investing in:

COURT Coursera $15.10
NOVA Sunnova Energy International $17.45
OPRX OptimizeRx $25.16
FLIGHT Flywire $14.87
PRTS CarParts.com $6.98

Small Cap Stock: Coursera (COUR)

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Distance learning is growing rapidly and becoming a popular way for people to learn new skills. By 2026, the e-learning market should reach nearly $400 billion. This represents a significant increase from the market estimate of nearly $200 billion in 2019.

Coursera (NYSE:COURT) is a MOOC (massive open online course) platform that offers courses from top universities and organizations.

In 2012, Coursera began ensuring that a world-class education is accessible to everyone, everywhere. They provide lots of free content with lots of learning potential for you and make it easier for students around the world to discover the value of a skill or subject.

Ten years later, many universities offer often free courses through Coursera, and the company has become a leading platform for higher education.

Coursera offers two courses: Specialization, a series of 4 to 7 related courses for a certificate of specialization at the end of all the courses, or a series of individual courses.

As the number of distance learners increases exponentially, an influx of students seeking to continue their academic learning is also increasing. Higher education will always remain relevant. Consequently, Coursera is doing well.

In her last trimester, it made $120.43 million in revenue, up 36.3% over the previous year. Last year, the company saw revenue grow 41% year-over-year to $415 million.

Coursera is growing, and there’s no avoiding it when it comes to small cap stocks.

Sunnova Energy International (NOVA)

A banner for Sunnova Energy International (NOVA) hangs on the New York Stock Exchange.

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Sunnova Energy International (NYSE:NOVA) is a global solar energy company that provides residential and commercial customers with clean, affordable and reliable power.

The company has been providing customers with clean, affordable and reliable solar power since 2006. Sunnova Energy has expanded its service areas in the United States and internationally to provide more people with access to renewable energy.

Its services include rooftop solar panels, residential rental programs, commercial rental, battery storage solutions, home automation solutions and international partnerships.

Sunnova Energy is a leading provider of residential solar services in the United States. The company currently holds 4-5% of the residential rooftop solar market share in the United States, but has seen steady growth in recent months.

Solar panels are a good source of energy for single-family homes, and only about 3% of the total 84 million households in the United States have solar panels on the roofs right now. Sunnova therefore has a huge total addressable value to exploit.

We are far from having reached our true potential, so it is important to start now in this niche segment. A recent extension of the investment tax credit in the United States for rooftop solar panels adds even more fuel to the fire and encourages seizing these opportunities now.

Small Cap Stocks: OptimizeRx (OPRX)

Light blue pills on a white background.  Pharmaceutical industry, medical treatment, prescription drugs concept.  Digital 3D render., biotech stocks, big pharma

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OptimizeRx (NASDAQ:OPRX) is a company that develops solutions for the pharmaceutical industry and other health-related businesses. They specialize in how technology, pharmaceutical companies, and healthcare providers work more closely together.

The team behind OptimizeRX has lots of great ideas on how to generate future revenue. They plan to focus more on the digital spend of pharma companies and integrate our solutions into customers’ business planning.

OptimizeRX has an active business model that provides corporate engagements and cross-selling services. Therefore, they record more revenue within their existing customer base.

When looking at companies in the healthcare industry, you need to be on the lookout for new drugs that are hitting the market. However, one aspect of this industry that cannot be overlooked is pharmaceutical sales calls. It’s so exciting to have a new drug cleared by the FDA, but that’s just the beginning. The sale of drugs cannot take place until the doctors prescribe it.

Prescribing physicians have seen more pharmaceutical sales representatives in recent years. Sometimes they are visited almost daily to increase their income. OptimizeRx can reach more healthcare professionals through the internet and use it to market pharmaceutical products. All this happens faster, easier and with better quality than the physical method.

Due to confinement, sales have exploded. The challenge will be managing expectations and ensuring the business thrives in the post-pandemic environment. In her last trimester, sales jumped to $13.73 million, an increase of 22.28%. So so far so good.

Flywire (FLYW)

calculator, pen, paper and a binder that says

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Flywire (NASDAQ:FLIGHT) is a company that helps customers manage their payroll and international payments. The company has grown rapidly over the past few years as more companies outsource this process to third-party vendors.

With Flywire, companies can send employees on international assignments without worrying about their payroll and payment needs. This includes withholding tax, remittances, currency conversion, and compliance with local employment laws.

Flywire is a payment processing company with experience in various industries, most recently in education, healthcare and travel. With more than a decade of cumulative experience, Flywire’s entire platform can remove “friction points” and streamline the process for customers in all industries struggling with outdated processes.

Flywire’s end market is expected to grow over the next few years and they will be able to capitalize on current customer loyalty.

Flywire makes money, though – it just has never been massively profitable. On the bright side, Flywire is in good shape and doing well. The auto parts retailer saw revenue increases 43% to $64.6 million and recorded a gross margin of 60.1%.

Small Cap Stocks: CarParts.com (PRTS)

A stack of auto parts

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CarParts.com (NASDAQ:PRTS) is a company specializing in the sale of auto parts online.

CarParts.com offers its customers a wide selection of auto parts for all makes and models. With over five million different parts available at any given time, CarParts.com gives customers the ability to find what they need when they need it without having to visit multiple different stores or websites to find what they are looking for. .

The auto parts e-commerce company reported excellent revenue and earnings growth in the first quarter. The company said it 15% revenue increase and beat everyone’s estimates.

Revenues increased 80% over two years when the pandemic hit. Net results were strong last year, with record adjusted EBITDA of more than $9 million and GAAP EPS of $0.04 per share, beating estimates.

Like many e-commerce stocks, this company has seen its value soar and plunge. With the latest results, investors should feel more confident in this stock’s ability to rebound over the long term and hold steady as the pandemic abates.

At the date of publication, Faizan Farooque did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

Faizan Farooque is a contributing author for InvestorPlace.com and many other financial sites. Faizan has several years of experience in stock market analysis and was a former data reporter at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions about their portfolio.

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