Zacks recommends five best small-cap stocks to buy in January 2026

Research outfit Zacks has named five small-cap stocks that investors should pay attention to in January, including both “buy” and “hold” ratings. According to Zacks, these stocks have been delivering earnings above Wall Street forecasts, a signal that the earnings outlook may be improving.

Forum Energy Technologies supplies equipment and solutions to the oil and gas industry. In the third quarter, the company posted earnings per share of $0.27, beating Wall Street expectations by 42%, according to MarketWatch data. 

Zacks rates Forum Energy shares as “buy.” Only one other analyst currently follows the company, assigning a “hold” rating. The average target price of $36.00 per share is about 14% below the current market price, MarketWatch data shows.

Solar tracker manufacturer Array Technologies has beaten Wall Street EPS estimates for three consecutive quarters. In the most recent quarter, earnings of $0.30 per share exceeded forecasts by 50%.

Zacks assigns the stock a “buy” rating. Thirteen Wall Street analysts also recommend buying the shares, while ten have “hold” ratings and one rates the stock as “sell.” The average target price stands at $11.11 per share, implying upside of nearly 16%.

Ophthalmic drugmaker Harrow reported third-quarter net income of $0.33 per diluted share, beating Wall Street expectations by almost 14%, according to Yahoo Finance data.

Zacks recommends Harrow shares as a "buy." All eight Wall Street analysts have the same rating. The average target price of $70.63 per share suggests upside of about 47% versus current levels.

Five9, which provides cloud-based contact-center software, has beaten Wall Street EPS estimates for at least four consecutive quarters. In the latest period, earnings of $0.78 per share topped consensus forecasts by 6.5%.

Zacks assigns the stock a “hold” rating. Most Wall Street analysts are more upbeat: 18 rate the shares as “buy,” versus six “hold” ratings. The average target price of $33.30 per share implies upside of about 89% from the last close.

GigaCloud Technology, which operates a platform for e-commerce companies, reported third-quarter EPS of $0.99, beating Wall Street expectations by 37.5%. The result marked the third consecutive quarter of earnings growth.

Despite the trend, Zacks recommends holding the stock due to volatility risks. Wall Street coverage remains limited: the shares carry two “buy” ratings and one “hold” rating. The average target price of $37.67 per share is nearly 7% below current quotes.