Freedom Broker highlights three small-cap companies with high growth potential in 2025

Freedom Broker has highlighted three small-cap companies worth investors’ attention. While operating across different industries, these companies share one common trait: their stock has a projected growth potential of at least 20% in 2025.

Strawberry Fields REIT

Strawberry Fields, a real estate investment trust (REIT) named after the famous 1967 Beatles song, primarily owns skilled nursing facilities. Demand for inpatient care remains steady in the U.S., as many tenants of such facilities derive significant revenues from government-funded Medicare and Medicaid programs, which are less sensitive to economic cycles, notes Freedom Broker.

The company’s rental payments follow a triple net (NNN) lease model, where tenants bear most operational expenses, such as taxes, insurance, and maintenance. While there are inherent conflicts of interest between Strawberry Fields and its tenants, this risk is offset by the company’s attractive valuation compared to competitors and its high dividend yield, according to Freedom Broker. In 2024, the company declared dividends four times, Nasdaq reports: $0.12 per share in March, $0.13 per share each in June and September, and $0.14 per share in December.

“Given favorable industry trends, the company’s fundamental undervaluation, and an appealing dividend yield, we maintain a ‘buy’ recommendation with a target price of $15 per share,” writes Freedom Broker.

This target suggests an upside of more than 45% from the latest closing price.

SKYX Platforms Corp.

SKYX Platforms provides smart home solutions through its SkyHome app, which allows users to control music, lighting, and brightness.

The company is steadily growing and expanding its footprint, according to Freedom Broker. Firstly, it has forged partnerships with retail chains like Home Depot and Wayfair. SKYX products are already available in 100 Home Depot stores as well as online, opening up new revenue opportunities. In the third quarter 2024, the company reported record revenue of $22.2 million, approximately 2% higher than the same period last year.

Secondly, SKYX Platforms is advancing its presence in the residential construction sector. By 2024, SKYX products will be installed in 15,000 homes across the U.S. and Canada.

And the company has room to grow further, Freedom Broker adds. SKYX Platforms’ innovations aim to enhance home safety and reduce risks associated with fires and damage, making them appealing to insurance companies. A major milestone will be the completion of testing for its Gen 3 platform, with mass production expected soon. This will strengthen SKYX Platforms’ position in the smart home technology sector.

Investor confidence is further bolstered by insider purchases in October 2024, analysts note. Along with insiders, Lance Shaner, owner of over 70 Marriott-branded hotels, also acquired shares. The company disclosed that the funding round raised $11 million from investors.

“With increasing demand for smart home technologies, SKYX Platforms is a promising market player poised for significant growth in 2025,” Freedom Broker concludes.

The target price for SKYX shares is $2.8 per share, implying a potential growth of 150%.

Innovative Solutions & Support 

Innovative Solutions & Support (IS&S) develops and sells avionics for civilian and military aviation. In fiscal year 2024 (ended September 30), the company reported a 35.6% increase in net revenue, reaching $47.2 million, and a 42.5% rise in EBITDA to $13.7 million. Management expects revenue and EBITDA to grow another 30% in fiscal year 2025, driven by new acquisitions and increased defense orders, Freedom Broker notes.

Notably, the company is involved in the U.S. Air Force’s KC-46A tanker aircraft program. In 2023, it received an order from Boeing for GPS systems for the T-7A Red Hawk trainer aircraft, a new system designed for training fighter and bomber pilots.

In October, IS&S announced the acquisition of a license for Honeywell’s product line, including display generators and flight control computers, to strengthen its position in the defense market.

Additionally, IS&S will launch its control unit for the Swiss light business jet Pilatus PC-24, featuring AI. This advanced technology is expected to retain key buyers in business aviation and, in the long run, may drive new orders from both defense companies and commercial aviation, Freedom Broker notes.

Freedom Broker has set a target price of $10.7 per share for IS&S shares, representing a 24% increase from the previous closing price.