Small-Cap Gems in the Post-2025 Correction Landscape

The post-2025 market correction has created a unique opportunity to identify undervalued small-cap stocks with strong fundamentals and growth catalysts. While macroeconomic volatility has pressured valuations, companies like Parke Bancorp (PKBK), Karat Packaging (KRT), BK Technologies (BKD), and Intermap Technologies (ITMSF) stand out for their resilience, operational discipline, and pricing dislocation. Below, we dissect their financial performance, risk management strategies, and valuation metrics to build a compelling case for immediate action.

Parke Bancorp: A Banking Sector Outperformer

Parke Bancorp’s Q2 2025 results underscore its dominance in the regional banking sector. Net income surged 28.3% year-over-year to $8.3 million, driven by a 24.9% increase in net interest income to $17.9 million as higher interest rates and loan growth boosted margins [4]. Total assets grew 1.3% to $2.17 billion, with loans and deposits expanding 3.6% and 3.8%, respectively [5].

Valuation metrics highlight its undervaluation: a trailing P/E of 8.54 and a 3.39% dividend yield position it as a compelling income and growth play [1]. Management’s commitment to shareholder returns is evident through a share buyback program extending through February 2026 [1]. However, insider selling by director Jeffrey H. Kripitz raises questions about sentiment [1]. Risk management remains robust, with reduced borrowings and a $33.8 million allowance for credit losses [5].

Karat Packaging: Operational Efficiency and Strategic Diversification

Karat Packaging outperformed expectations in Q2 2025, reporting $124 million in revenue (up 10.1% YoY) and $0.57 EPS (beating estimates) [2]. Its EBITDA of $21.9 million for the quarter reflects a 6.4% YoY growth in trailing twelve-month EBITDA to $59.1 million [6]. A debt-to-equity ratio of 0.60 indicates prudent leverage [3].

The company’s strategic shift to reduce reliance on China—now just 10% of sourcing—is a critical catalyst. Diversification into Latin America and Southeast Asia mitigates supply chain risks while opening new revenue streams [2]. With a P/E of 15.51, Karat Packaging trades at a discount to its historical average, offering a margin of safety for long-term investors [5].

BK Technologies: Margin Expansion and Federal Contract Wins

BK Technologies delivered a 4.5% YoY revenue increase to $21.2 million in Q2 2025, with gross margins expanding to 47.4% from 37.3% in 2024 [2]. The company raised full-year guidance, projecting GAAP diluted EPS of $3.15 and non-GAAP adjusted EPS of $3.80, driven by a $12.9 million USDA Forest Service contract [2].

Risk management has been a focus, with the resolution of a government client’s cost-cutting pressures improving margins and visibility [1]. While EBITDA and debt metrics are not disclosed in the provided data, BK Technologies’ operational efficiency and federal order pipeline suggest strong cash flow potential.

Intermap Technologies: High-Risk, High-Reward Play

Intermap Technologies faced a Q2 2025 revenue decline to $3.0 million but improved operating cash flow to $2.1 million, a stark contrast to the $500,000 use in 2024 [4]. The company reaffirmed a $30–35 million revenue target and a 28% EBITDA margin [4]. Despite a concerning Altman Z-Score of -15.78, a recent C$12 million capital raise and conservative leverage (Debt/Equity of 0.12) support its near-term viability [3].

Valuation extremes are evident: a trailing P/E of 212.28 versus a forward P/E of 12.38 [4]. This dislocation reflects market skepticism but also creates a margin of safety if the company executes on its government tender pipeline in Southeast Asia and North America [4].

Sector Tailwinds and Immediate Action

The post-2025 correction has disproportionately impacted small-cap stocks, creating entry points for companies with durable moats. Parke Bancorp benefits from rising interest rates, Karat Packaging from supply chain diversification, BK Technologies from federal demand, and Intermap from its EBITDA margin potential.

Source:
[1] Parke Bancorp ($PKBK): CEO's Continuous Buying vs ... [https://www.waiker.ai/data-lab/waiker-news/6503]
[2] Parke Bancorp Second Quarter 2025 Earnings: EPS: US$0.70 ... [https://finance.yahoo.com/news/parke-bancorp-second-quarter-2025-120400181.html]
[3] Intermap Reports Second Quarter 2025 Results [https://www.intermap.com/pressreleases/2025/08/intermap-reports-second-quarter-2025-results]
[4] Karat Packaging Inc. (KRT) EBITDA annual & quarterly ... [https://valuesense.io/ticker/krt/ebitda]