3 Small-Cap Growth Stocks to Buy in 2022
Small-cap growth stocks are a category of stocks that generally have market caps below $2 billion. And they have been growing at a faster rate than the overall stock market. Many small-cap growth stocks to buy are young companies that are still in the early stages of their growth trajectory. And there can be no guarantee of future success. However, these companies often offer investors the potential for above-average returns.
One of the key things to watch with small-cap growth stocks is the company’s earnings growth rate. This is because a company’s stock price is typically driven by its earnings power over the long run. And while there are other factors that can affect a stock’s price in the short term, such as market sentiment or macroeconomic conditions, earnings growth is typically the key driver of a stock’s price over the long-term.
Another thing to watch with small-cap growth stocks is the company’s valuation. Because these companies are often growing at a faster rate than the overall market, they can sometimes become overvalued. As such, it’s important to make sure that you’re paying a reasonable price for a given company’s shares.
What to Keep in Mind with Small-Cap Growth Stocks
If you’re thinking about investing in small-cap growth stocks, there are a few things to keep in mind. First, remember that these stocks can be volatile and offer no guarantee of success.
Second, make sure to do your homework on any given company before investing. And finally, don’t forget to monitor a company’s valuation to make sure you’re not paying too much for its shares.
Small-cap growth stocks can offer investors the potential for above-average returns. But they come with risk. Before investing, be sure to do your homework and monitor a company’s valuation. This is to ensure you’re not overpaying for its shares.
Here are three great small-cap stocks that are showing a lot of potential for the coming years.
Best Small-Cap Growth Stocks to Buy
No. 3 Titan Machinery, Inc. (Nasdaq: TITN)
Titan Machinery Inc. is a leading network of agricultural and construction equipment stores in the United States and Europe. The company owns and operates a chain of full-service dealerships. These dealerships sell, lease, and service new and used equipment. Plus, parts and services. And they do this for customers in the agricultural, construction, and consumer sectors.
This small cap growth stock is led by CEO David Meyer, who took the helm in early 2020. Under Meyer’s leadership, the company has made a number of strategic decisions. And these decisions have positioned it well for growth in the coming years.
In 2021, Titan Machinery acquired Jaycox Implement, Inc., a leading provider of agricultural equipment in Iowa. This acquisition strengthened Titan’s position in the Midwest. And it added new products and services to its offerings.
Looking ahead, this small-cap growth stock is well positioned for expansion. They because they have a strong balance sheet, experienced management team, and expanding dealer network.
No. 2 The Lovesac Company (Nasdaq: LOVE)
The Lovesac Company is a small-cap growth stock that’s also a leading retailer of furniture and home furnishings. It was founded in 1995 by Shawn David Nelson. The company was started with the vision of creating a unique furniture brand that would offer high-quality products at an affordable price.
And since its inception, Lovesac has experienced strong growth. The company now operates over 100 retail stores across the United States and Canada. In addition, their products are available online and through select retailers.
The company’s unique differentiation lies in its focus on a unique product. The furnitures high-quality material will allow it to last for years. In addition, the company offers a wide range of customization options. This allows customers to create their perfect piece of furniture.
This small-cap growth stock’s prospects remain strong. The company is well-positioned to capitalize on the growing demand for furniture and home furnishings. Moreover, their unique product offering gives it a competitive advantage in the market.
As such, Lovesac is a great stock to buy in 2022. Customer service and satisfaction are also a big deal for them. This shows through offering a lifetime warranty on all products, which is unheard of in the furniture industry. In addition, the company has a “no questions asked” return policy. This commitment to customer service has helped Lovesac build a loyal following among its customers.
Lovesac’s strong growth prospects and commitment to customer service make it a compelling investment. Especially for long-term investors. The stock is currently trading at around $50 per share. Which, represents a significant discount to its 2020- high of $92 per share. Given the company’s strong fundamentals and growth prospects, Lovesac is a great small-cap growth stock to buy.
No. 1 Hibbett, Inc. (Nasdaq: HIBB)
Hibbett, Inc. is a publicly traded company that operates in the retail sector. The company was founded in 1945. And, it’s headquartered in Birmingham, Alabama. Hibbett is a leading retailer of sporting goods and apparel, with over 950 stores across the United States.
Despite being a small-cap growth stock, Hibbett has shown strong prospects in recent years. In 2021, the company’s sales increased by 9% compared to the previous year. This growth is expected to continue in the future. And analysts forecast that Hibbett will report sales of $2 billion in 2022.
There are several reasons why Hibbett is a good stock to buy in 2022. First, the company is benefiting from tailwinds in the retail sector as consumers increasingly shop online. Hibbett’s e-commerce sales grew by 60% in 2021. And this growth is expecting to continue. Secondly, the company is investing heavily in its store fleet. Which should help drive sales growth. Finally, Hibbett has a strong balance sheet, with over $200 million in cash and no debt.
If you’re looking for a small-cap growth stock to buy in 2022, Hibbett is a great option. The company is benefiting from favorable industry trends. Plus, it’s investing heavily in its future growth. Additionally, Hibbett has a strong financial position, which should give investors confidence in the company’s long-term prospects.
Final Thoughts on Small-Cap Growth Stocks to Buy
Titan Machinery, The Lovesac Company and Hibbett, Inc. are all great small-cap growth stocks to buy in 2022. Each company is benefiting from favorable industry trends and is investing heavily in its future growth. In addition, each company has a strong financial position and a commitment to customer service. As such, these companies represent compelling investment opportunities for long-term investors.