We recently explored the 8 best small-cap stocks to buy according to analysts. You can visit this free list here.
Though Getty Images Holdings, Inc. (NYSE:GETY) ranks 6th in our list of the 8 Best Small-Cap Stocks Ready to Explode According to Analysts, we have analyzed the stock in detail.
Small-cap stocks are companies that have a market capitalization falling between $300 million and $2 billion.
We’ve often seen these smaller enterprises outshined by their large-cap counterparts, also because stocks like Google, Apple, Amazon etc. are known for their power to move entire markets. But it doesn’t mean that these small-cap stocks cannot present some golden opportunities for investment.
Small-cap stocks started gaining momentum during the last quarter of 2023, driven primarily by the AI-led rally that pushed the entire stock market high, thus putting away any immediate worries of an upcoming recession. According to Julius Baer, a private banking company based in Zurich, small-cap stocks have proven to, in fact, even outperform their larger-cap counterparts over very long periods. The report mentions that a dollar invested in US large-caps in 1926 grew in value to $5,767 by the end of 2018. Meanwhile, a single dollar invested in small-caps instead would have been worth a whopping $38,842 – almost seven times more.
However, what really makes these stocks attractive to investors is their potential for high returns. We will much more often see companies doubling their market capitalization from $1 billion to $2 billion, than let’s say from $1 trillion to $2 trillion. Small-caps tend to be fast-growing companies that can take more chances and respond to events and trends more efficiently than larger companies. Moreover, a recent analysis by MorningStar has revealed that small-caps look cheaper now relative to the broad market than at any time in the last 20 years.
But, of course, higher returns come with higher risks. Small-caps are highly vulnerable to macroeconomic factors and are thus more prone to market fluctuations, simply because they don’t possess the same financial power as larger corporations, making it hard for them to survive unexpected emergencies. Additionally, these companies often have fewer outstanding shares, can’t borrow money as easily as bigger companies, and are more likely to have negative cash flows, leading to them paying lower or no dividends. They are also usually covered by fewer analysts and thus come with limited transparency and data for individual investors.
According to Marcio Silveira, a CFP, former equity analyst, and owner of Silvergreen Sustainable Investments:
“Since the 2010s, we’ve had some changes in how the economy works. All the top companies are tech companies now, and small-caps are underperforming because they can’t compete with these mega winner-take-all companies. You can find great opportunities in individual small-cap stocks, but you need to do a lot of fundamental analysis to find the hidden gems.”
Getty Images Holdings, Inc. (NYSE:GETY)
Upside Potential as of May 21st: 77.09%
Market Cap: $1.51 billion
Next up on our list of Small Company Stocks that You Should Own Now is Getty Images Holdings, Inc. (NYSE:GETY), a preeminent global visual content creator and marketplace that offers a full range of content solutions to meet the needs of any customer around the globe, no matter their size.
The Seattle-based company reported a revenue of $222.3 million in Q1 2024, a decrease of 5.7% YoY on both a reported and currency neutral basis. However, the company boasted a net income of $13.6 million, up 325% from the $3.2 million reported in the same quarter last year. The company also grew its annual subscribers by 79% to 262,000. According to analysts, GETY has an average price target of $6.57, representing an upside potential of 77.09%. The analysts have maintained a Strong Buy position on the stock.
Getty Images Holdings, Inc. (NYSE:GETY) is the market leader in the rapidly growing visual content industry. Additionally, the company expects to deliver topline growth in its key businesses in 2024.
Stocks of Getty Images Holdings, Inc. (NYSE:GETY) were held by 2 hedge funds at the end of Q4 2023, with a collective stake value of $1.155 million.
Getty Images Holdings, Inc. (NYSE:GETY) ranks 6th on our list. To check out the rest of the rankings, visit 8 Best Small-Cap Stocks Ready to Explode According to Analysts.
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Disclosure: None. This article is originally published at Insider Monkey.