Hidden Wealth Makers: 3 Small-Cap Stocks With the Potential to 10X by 2027

Stocks to buy

In general, many people are drawn to small-cap companies that have the potential to soar in value. Discover three such undiscovered money generators here. These companies are involved in the consumer discretionary, financial services and technology industries.

At the forefront of the homebuilding business, the first one may benefit from increased demand for residential real estate. After gaining a solid presence in the housing market and laying the groundwork for exponential expansion, the company has demonstrated a notable rise in net new orders.

The second is a financial services company that shows promise and uses its banking platform to draw and keep depositors. The company’s competitive products and strategic collaborations have resulted in a significant rise in total deposits, which indicates a solid financial base and potential for future growth.

In the meantime, the third one is a shining star in information technology. The company has a strong revenue growth based on customer demand for its cutting-edge solutions. Read more to learn how these opportunities result from operational edge, market positioning, and strategic moves.

Beazer Homes (BZH)

Source: Shutterstock

Q1 fiscal 2024 saw a solid rise in net new orders for Beazer Homes (NYSE:BZH). With 823 orders, the net new orders increased by 70.7% from Q1 fiscal 2023. The significant increase in net new orders suggests a high demand for the residences offered by Beazer Homes.

In detail, two major improvements in sales speed and an increase in the average community count are responsible for the increase in net new orders. Sales speed boosted by 50.4%, from 1.3 orders per community per month in Q1 2023 to 2 orders per community per month. 

Furthermore, there was a 13.5% increase in the average number of communities, from 121 to 137. Additionally, Beazer Homes has sharp strategic growth strategies to accomplish multi-year targets. These include community count expansion, balance sheet solidity and a distinct product approach. 

By fiscal 2026, the company may have more than 200 active communities, which reflects an estimated 15% annual growth rate. Finally, Beazer Homes may reduce its net-debt to net-cap ratio to below 30% by 2026. As a result, this financial stability may optimize valuations.

PagSeguro (PAGS)

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Total deposits made to PagSeguro (NYSE:PAGS) provide a considerable funding source for its banking operations. These deposits provide the capital and liquidity the company needs to stabilize and expand its lending and investing activities. Total deposits rose significantly in Q4 2023, hitting R$27.6 billion, recording a solid growth rate of 33.4% from Q4 2022.

Additionally, the boost in total deposits indicates PagSeguro’s capability to attract and retain depositors using its banking platform. Customers have responded favorably to the company’s focus on providing competitive interest rates, flexible deposit alternatives, and sharp security features, increasing deposit inflows and strengthening its financing base.

Moreover, PagSeguro’s clientele reflects the company’s expansion and income production. PagBank ended the quarter with 31.1 million clients, a rise of 12.2% from Q4 2022. Hence, the rise in active clients — which reached 16.7 million in 4Q23 — shows how well PagSeguro has captivated customers and promoted consistent platform usage. 

Overall, the company is in a good position to develop steadily by adding more customers and introducing new services and products as it innovates.

Radcom (RDCM)

Source: Shutterstock

Radcom (NASDAQ:RDCM) has demonstrated remarkable revenue growth in 2023, as seen by its full-year and Q4 performance. Revenue increased to $14 million in Q4 alone, a significant 14% rise over Q4 2022. Radcom maintained this growing momentum throughout 2023, generating $51.6 million in revenue overall, a respectable 12% increase over 2022.

Moreover, the patterns show how Radcom can continually meet customer demand for its products, resulting in long-term, steady revenue growth. This rise is due to the growing uptake of 5G technology, market development, and progressive sales and marketing tactics. 

Furthermore, the company is in solid financial standing with high liquidity and sharp cash flow. For 2023, with $82.2 million in cash, the company has a sizable liquidity reserve. Additionally, Radcom kept its balance sheet debt-free, which lowers interest costs and improves financial flexibility.

Overall, Radcom’s positive cash flow of $4.5 million in 2023 proves its solid financial standing and effective operations. Lastly, the company progressively derives cash from its core business operations, which proves its capacity to support operations, investments, and internal growth plans. 

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Read More:Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Yiannis Zourmpanos did not hold (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.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.

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