diff --git a/CHANGELOG.md b/CHANGELOG.md
index 0620505..30058d8 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,7 @@
 # main [(unreleased)](https://github.com/fastruby/next_rails/compare/v1.0.4...main)
 
+* [FEATURE: Try to find the latest **compatible** version of a gem if the latest version is not compatible with the desired Rails version when checking compatibility](https://github.com/fastruby/next_rails/pull/49)
+
 # v1.0.5 / 2022-03-29 [(commits)](https://github.com/fastruby/next_rails/compare/v1.0.4...v1.0.5)
 
 * [FEATURE: Initialize the Gemfile.next.lock to avoid major version jumps when used without an initial Gemfile.next.lock](https://github.com/fastruby/next_rails/pull/25)
@@ -14,6 +16,7 @@
 
 * [BUGFIX: Update README.md to better document this `ten_years_rails` fork](https://github.com/fastruby/next_rails/pull/11)
 * [BUGFIX: Make ActionView an optional dependency](https://github.com/fastruby/next_rails/pull/6)
+
 # v1.0.2 / 2020-01-20
 
 # v1.0.1 / 2019-07-26
diff --git a/lib/next_rails/bundle_report.rb b/lib/next_rails/bundle_report.rb
index 11c89d4..27bcb13 100644
--- a/lib/next_rails/bundle_report.rb
+++ b/lib/next_rails/bundle_report.rb
@@ -8,22 +8,19 @@ class BundleReport
     def self.compatibility(rails_version:, include_rails_gems:)
       incompatible_gems = NextRails::GemInfo.all.reject do |gem|
         gem.compatible_with_rails?(rails_version: rails_version) || (!include_rails_gems && gem.from_rails?)
-      end.sort_by do |gem|
-        [
-          gem.latest_version.compatible_with_rails?(rails_version: rails_version) ? 0 : 1,
-          gem.name
-        ].join("-")
-      end
+      end.sort_by { |gem| gem.name }
+
+      incompatible_gems.each { |gem| gem.find_latest_compatible(rails_version: rails_version) }
 
       incompatible_gems_by_state = incompatible_gems.group_by { |gem| gem.state(rails_version) }
 
       template = <<~ERB
-        <% if incompatible_gems_by_state[:latest_compatible] -%>
+        <% if incompatible_gems_by_state[:found_compatible] -%>
         <%= "=> Incompatible with Rails #{rails_version} (with new versions that are compatible):".white.bold %>
         <%= "These gems will need to be upgraded before upgrading to Rails #{rails_version}.".italic %>
 
-        <% incompatible_gems_by_state[:latest_compatible].each do |gem| -%>
-        <%= gem_header(gem) %> - upgrade to <%= gem.latest_version.version %>
+        <% incompatible_gems_by_state[:found_compatible].each do |gem| -%>
+        <%= gem_header(gem) %> - upgrade to <%= gem.latest_compatible_version.version %>
         <% end -%>
 
         <% end -%>
diff --git a/lib/next_rails/gem_info.rb b/lib/next_rails/gem_info.rb
index 0a2433d..dc8b9f2 100644
--- a/lib/next_rails/gem_info.rb
+++ b/lib/next_rails/gem_info.rb
@@ -28,13 +28,28 @@ def state(_)
       end
     end
 
+    RAILS_GEMS = [
+      "rails",
+      "activemodel",
+      "activerecord",
+      "actionmailer",
+      "actioncable",
+      "actionpack",
+      "actionview",
+      "activejob",
+      "activestorage",
+      "activesupport",
+      "railties",
+    ].freeze
+
     def self.all
       Gem::Specification.each.map do |gem_specification|
         new(gem_specification)
       end
     end
 
-    attr_reader :gem_specification, :version, :name
+    attr_reader :gem_specification, :version, :name, :latest_compatible_version
+
     def initialize(gem_specification)
       @gem_specification = gem_specification
       @version = gem_specification.version
@@ -57,59 +72,69 @@ def up_to_date?
       version == latest_version.version
     end
 
+    def from_rails?
+      RAILS_GEMS.include?(name)
+    end
+
     def state(rails_version)
       if compatible_with_rails?(rails_version: rails_version)
         :compatible
-      elsif latest_version.compatible_with_rails?(rails_version: rails_version)
-        :latest_compatible
-      elsif latest_version.version == "NOT FOUND"
+      elsif latest_compatible_version.version == "NOT FOUND"
         :no_new_version
+      elsif latest_compatible_version
+        :found_compatible
       else
         :incompatible
       end
     end
 
-    def latest_version
-      @latest_version ||= begin
-        latest_gem_specification = Gem.latest_spec_for(name)
-        if latest_gem_specification
-          GemInfo.new(latest_gem_specification)
-        else
-          NullGemInfo.new
-        end
-      end
-    end
-
-    def compatible_with_rails?(rails_version: Gem::Version.new("5.0"))
+    def compatible_with_rails?(rails_version:)
       unsatisfied_rails_dependencies(rails_version: rails_version).empty?
     end
 
     def unsatisfied_rails_dependencies(rails_version:)
-      rails_dependencies = gem_specification.runtime_dependencies.select {|dependency| rails_gems.include?(dependency.name) }
+      spec_compatible_with_rails?(specification: gem_specification, rails_version: rails_version)
+    end
 
-      rails_dependencies.reject do |rails_dependency|
-        rails_dependency.requirement.satisfied_by?(Gem::Version.new(rails_version))
+    def find_latest_compatible(rails_version:)
+      dependency = Gem::Dependency.new(@name)
+      fetcher = Gem::SpecFetcher.new
+
+      # list all available data for released gems
+      list, errors = fetcher.available_specs(:released)
+
+      specs = []
+      # filter only specs for the current gem and older versions
+      list.each do |source, gem_tuples|
+        gem_tuples.each do |gem_tuple|
+          if gem_tuple.name == @name && gem_tuple.version > @version
+            specs << source.fetch_spec(gem_tuple)
+          end
+        end
       end
-    end
 
-    def from_rails?
-      rails_gems.include?(name)
+      # if nothing is found, consider gem incompatible
+      if specs.empty?
+        @latest_compatible_version = NullGemInfo.new
+        return
+      end
+
+      # if specs are found, look for the first one from that is compatible
+      # with the desired rails version starting from the end
+      specs.reverse.each do |spec|
+        if spec_compatible_with_rails?(specification: spec, rails_version: rails_version).empty?
+          @latest_compatible_version = spec
+          break
+        end
+      end
     end
 
-    private def rails_gems
-      [
-        "rails",
-        "activemodel",
-        "activerecord",
-        "actionmailer",
-        "actioncable",
-        "actionpack",
-        "actionview",
-        "activejob",
-        "activestorage",
-        "activesupport",
-        "railties",
-      ]
+    def spec_compatible_with_rails?(specification:, rails_version:)
+      rails_dependencies = specification.runtime_dependencies.select {|dependency| RAILS_GEMS.include?(dependency.name) }
+
+      rails_dependencies.reject do |rails_dependency|
+        rails_dependency.requirement.satisfied_by?(Gem::Version.new(rails_version))
+      end
     end
   end
 end