The self-proclaimed “tariff man” is back at the helm of the United States of America. On Nov. 5, Donald Trump had a resounding victory to become the nation’s 47th president. 

On Nov. 7, the Fed decided to reduce the benchmark lending rate by 25 basis points in its November FOMC meeting. This rate cut follows an aggressive 50 basis-point reduction in the Fed Fund rate in its previous FOMC meeting in September.

These two recent developments should benefit small businesses to a good extent. Here we recommend five small-cap stocks with a favorable Zacks Rank and solid upside potential in the short term. These are - Private Bancorp of America Inc. PBAM, MediaAlpha Inc. MAX, Tactile Systems Technology Inc. TCMD, Travelzoo TZOO and South Atlantic Bancshares Inc. SABK.

Trump Tariff to Boost Small Businesses

Since the onset of the COVID-19 pandemic in March 2020, small businesses have suffered a lot. During the pandemic, the main concern was demand, as social distancing resulted in a slowdown in U.S. consumer spending, which hurt this segment. The global breakdown of supply-chain systems and the shortage of manpower have affected these companies the most.

Donald Trump’s implementation of tariffs on foreign products is primarily aimed at strengthening U.S. industries by forcing companies to bring back jobs to the country. Small businesses have no geographical diversification and depend on U.S. consumers. 

Imposition of tariffs on foreign products, especially those used as inputs to final products will make cheaper imported goods (particularly Chinese inputs) more costly. This will help indigenous small businesses to achieve a level playing field. 

Rate Cut to Benefit Small Businesses

After the pandemic, the major issue for U.S. small businesses was galloping inflation. This space suffered significantly due to a higher interest rate regime. The companies operate on a thin profit margin, and most new businesses take time to achieve profitability.

Small businesses are unable to pass on the total hike in input costs to their final products, taking a toll on their financial condition. Small businesses are generally dependent on cheap sources of credit for their survival. Therefore, a gradual decline in the benchmark interest rate will help this space immensely.

Buy 5 Small Cap Stocks With Solid Upside in Short Term 

These five stocks have strong growth potential for 2025 and have seen positive earnings estimate revisions in the last 30 days. Each of our picks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the price performance of our five picks year to date.

Image Source: Zacks Investment Research

Private Bancorp of America Inc. 

Zacks Rank #1 Private Bancorp of America provides banking products and services to individuals and businesses in California. PBAM offers checking and savings, money market, certificate of deposit, sweep, zero balance, and individual retirement accounts, unsecured lines of credit, personal credit lines, and term loans, additional services, such as direct deposits, online banking, ATM and debit cards, credit cards, savings/line of credit overdraft protection, and safe deposit boxes; and certificate of deposit account registry services.

Impressive Short-Term Upside for PBAM Stock

Private Bancorp of America has an expected revenue and earnings growth rate of 11.1% and 5.6%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 1% over the last seven days. 

The average short-term price target of brokerage firms represents an increase of 28% from the last closing price of $49.99. The brokerage target price is currently in the range of $60 - $71. This indicates a maximum upside of 42% and no downside.

MediaAlpha Inc.

Zacks Rank #1 MediaAlpha operates an insurance customer acquisition platform in the United States. MAX optimizes customer acquisition in various verticals of property and casualty insurance, health insurance, and life insurance. MAX provides real-time programmatic technology platform specializing in vertical search and metasearch.

Astonishing Short-Term Upside for MAX Shares

MediaAlpha has an expected revenue and earnings growth rate of 30.1% and 82.5%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 28.3% over the last seven days. 

The average short-term price target of brokerage firms represents an increase of 113.9% from the last closing price of $11.71. The brokerage target price is currently in the range of $13 - $31. This indicates a maximum upside of 164.7% and no downside.

Tactile Systems Technology Inc.

Zacks Rank #1Tactile Systems Technology is a medical technology company which develops medical devices for the treatment of chronic diseases in the United States. TCMD’s product pipeline consists of Flexitouch System, the Entre System and the ACTitouch System. TCMD also provides Kylee, a mobile application to help patients learn about lymphedema, track their symptoms, and treatment

Robust Short-Term Upside for TCMD Stock

Tactile Systems Technology has an expected revenue and earnings growth rate of 10.1% and 33.1%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 7.4% over the last seven days. 

The average short-term price target of brokerage firms represents an increase of 45.9% from the last closing price of $15.26. The brokerage target price is currently in the range of $16 - $25. This indicates a maximum upside of 63.8% and no downside.

Travelzoo

Zacks Rank #2 Travelzoo is an Internet media company. TZOO engages in the provision of information to subscribers and website users about travel, entertainment and local deals available from companies. TZOO’s operating segment consists of Asia Pacific, Europe and North America.

Excellent Short-Term Upside for TZOO Shares

Travelzoo has an expected revenue and earnings growth rate of 14.1% and 8.7%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 4.4% over the last 30 days. 

The average short-term price target of brokerage firms represents an increase of 26.6% from the last closing price of $17.35. The brokerage target price is currently in the range of $17 - $35. This indicates a maximum upside of 101.7% and no downside.

South Atlantic Bancshares Inc.

Zacks Rank #1 South Atlantic Bancshares operates as the bank holding company for South Atlantic Bank which provides banking products and services to individuals and businesses. SBAK offers checking, money market and savings accounts, certificates of deposits, individual retirement accounts, health savings accounts and residential first mortgages, secured loans, home equity lines of credit, auto and recreational vehicle loans. SBAK also provides treasury, remote deposit capture, and merchant card services, telephone and online banking, ATM services, and debit and credit cards.

Strong Short-Term Upside for SBAK Stock

South Atlantic Bancshares has an expected revenue and earnings growth rate of 10.5% and 19.3%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 10.3% over the last seven days. 

The average short-term price target of brokerage firms represents an increase of 14.2% from the last closing price of $14.22. The brokerage target price is currently in the range of $16 - $16.25. This indicates a maximum upside of 14.3% and no downside.

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Tactile Systems Technology, Inc. (TCMD) : Free Stock Analysis Report

Travelzoo (TZOO) : Free Stock Analysis Report

South Atlantic Bancshares, Inc. (SABK) : Free Stock Analysis Report

Private Bancorp of America, Inc. (PBAM) : Free Stock Analysis Report

MediaAlpha, Inc. (MAX) : Free Stock Analysis Report

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