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Small-cap stocks are often targeted for their potential, though it’s important to remember they’re generally more volatile and more sensitive to external factors than larger companies.
And several small-cap stocks, specifically Green Dot (GDOT - Free Report), Priority Technology (PRTH - Free Report), and Movado Group (MOV - Free Report), have enjoyed notable strength over the past month, with each also sporting the highly coveted Zacks Rank #1 (Strong Buy).
Each has outperformed relative to the S&P 500 over the past month or so, as shown below.
Image Source: Zacks Investment Research
Green Dot Posts Strong Results
Green Dot is a financial technology and bank holding company that delivers seamless banking and payments solutions to consumers and businesses of all sizes. Momentum in shares over recent months has been aided by better-than-expected quarterly results, with GDOT posting a strong double-beat relative to Zacks Consensus estimates in its latest print.
Sales grew nearly 18% year-over-year in the above-mentioned release, with momentum partly led by a strong performance in its tax processing business. Other business divisions also displayed momentum, with its overall gross dollar volume totaling $43.2 billion, up nicely from $37.3 billion in the same period last year.
Sales growth has remained consistently strong over recent months, with its Q1 period typically reflecting its strongest period of the year. Importantly, the revisions trend for its current fiscal year has shown a high level of bullishness over recent months, with the current $1.68 Zacks Consensus EPS estimate up nearly 17% over the last year.
Image Source: Zacks Investment Research
Priority Technology Sees Stronger Profitability Picture
Priority Technology is an all-in-one banking and payments fintech company that automates payables, receivables, and treasury management to help optimize a business's cash flow. The company’s latest set of quarterly results were positive, with PRTH posting 11.1% YoY sales growth while also seeing its gross margin expand by roughly 70 basis points from the same period last year.
The 11.1% YoY sales growth rate reflected the strongest read we’ve seen from PRTH since the end of 2024, with top-line momentum leading the company to fully affirm its current-year guidance. An improving profitability picture is showing up nicely in its growth profile, with current Zacks Consensus estimates suggesting 20% YoY EPS growth in its current fiscal year and 17% in FY27.
Image Source: Zacks Investment Research
Movado Group Crushes Expectations
Movado Group is a major player in the watch industry worldwide, offering a strong portfolio of ten widely respected brands. Just like those above, shares have found notable strength following its most recent set of quarterly results, with the company blowing away the Zacks Consensus EPS estimate by more than 430% while also posting a 5% sales surprise.
Sales growth showed nice acceleration in the above-mentioned release, with revenue of $142 million climbing more than 8% YoY. The growth rate reflected the strongest we’ve seen from the company dating back to early 2023, with adjusted EPS also seeing a massive 300% YoY climb from the same period last year.
MOV sports the most bullish EPS outlook out of the bunch, with EPS expectations climbing strongly nearly across all near-term timeframes.
Image Source: Zacks Investment Research
Bottom Line
Small caps are often attractive to investors seeking lesser-known companies with room to grow, though it’s always important to remember the higher volatility of these stocks. And over recent months, all three above – Green Dot, Priority Technology, and Movado Group – have shown notable momentum paired with brightening EPS outlooks, with near-term momentum looking to remain strong on the back of their current Zacks Rank #1 (Strong Buy) ratings.
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