ASX small-cap stocks can deliver very attractive returns.
Heading into ASX earnings season, it is typically the large capitalisation ASX stocks that receive the most attention. These are covered by the analysts at the large investment banks and broker firms who reveal their forecasts ahead of company reporting.
However, many lucrative opportunities lie in the ASX small-cap space.
ASX small capitalisation stocks are defined as those with a market capitalisation of less than $2 billion. Such companies are typically underfollowed and can fly under the radar.
When considering what to buy ahead of earnings season, investors should consider these opportunities also.
In its report SMID-CAP Best Picks July 2025, Macquarie Group Ltd (ASX: MQG) revealed its top picks this month in the small and mid-sized capitalisation space.
Here are three ASX small-cap stocks named in that report.
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Bega Cheese Ltd (ASX: BGA)
Macquarie currently sees a lot of potential in Bega Cheese.
The company produces and sells a variety of dairy and food products, including household names such as Vegemite, Farmer's Union, and Dare.
It has a market capitalisation of around $1.6 billion.
Bega's shares have risen 16% over the past 12 months. However, Macquarie thinks they will be much higher in 12 months.
Macquarie currently has an outperform rating and price target of $6.40 on Bega shares. That's 25% upside from here, based on Friday's closing price of $5.13.
The broker cited its "ongoing progress to 2028 targets and upside via M&A" as catalysts that could drive strong share price action over the next year.
Jumbo Interactive Ltd (ASX: JIN)
Macquarie also has high hopes for fellow ASX small-cap Jumbo Interactive over the next 12 months.
Jumbo Interactive sells lottery games in Australia.
It has a market capitalisation of just $643 million, after falling 37% over the past 12 months.
However, Macquarie views this as a buying opportunity.
According to Macquarie, "Jumbo generates more than 75% of earnings from Australian lottery businesses, which are subject to short-term volatility based on jackpot activity, but over the medium term have proven to show robust growth."
The broker predicts lottery volumes have dropped 9% in FY25, and will rebound 11.5% in FY26.
Accordingly, the broker believes Jumbo shares are attractively valued today. It has assigned the stock an outperform rating and a price target of $13.90.
Given that shares closed at $10.31 on Friday, this suggests 35% upside from here.
Alpha HPA Ltd (ASX: A4N)
In its report, Macquarie also named Alpha HPA.
Alpha APA delivers a critical ingredient for energy storage and other breakthrough technologies through its Smart SX Technology.
The company has a market capitalisation of around $1 billion.
It has risen 15% in the past 12 months.
However, Macquarie is forecasting the next 12 months to be much more lucrative.
The broker has placed an outperform rating on the stock and a price target of $1.42.
Given that shares closed at $0.96 on Friday, this suggests 48% upside from here.
Driving this forecast, Macquarie noted:
Alpha's novel HPA manufacturing process and technology offers it strong quality and cost advantages across a number of high purity alumina end markets. Alpha is gaining traction with prospective customers across industries (particularly the semi-conductor sector).
