Investors looking for hidden gems should keep an eye on small-cap stocks because they’re frequently overlooked by Wall Street. Many opportunities exist in this part of the market, but it is also a high-risk, high-reward environment due to the lack of reliable analyst price targets.
These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. That said, here is one small-cap stock that could be the next 100 bagger and two best left ignored.
Two Small-Cap Stocks to Sell:
Crocs (CROX)
Market Cap: $4.09 billion
Founded in 2002, Crocs (NASDAQ: CROX) sells casual footwear and is known for its iconic clog shoe.
Why Does CROX Fall Short?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Estimated sales decline of 2.6% for the next 12 months implies a challenging demand environment
- Waning returns on capital imply its previous profit engines are losing steam
At $79.25 per share, Crocs trades at 6.8x forward P/E. If you’re considering CROX for your portfolio, see our FREE research report to learn more.
NeoGenomics (NEO)
Market Cap: $1.30 billion
Operating a network of CAP-accredited and CLIA-certified laboratories across the United States and United Kingdom, NeoGenomics (NASDAQ: NEO) provides specialized cancer diagnostic testing services, including genetic analysis, molecular testing, and pathology consultation for oncologists and healthcare providers.
Why Should You Dump NEO?
- Smaller revenue base of $709.2 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Push for growth has led to negative returns on capital, signaling value destruction
- High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens
NeoGenomics’s stock price of $10.02 implies a valuation ratio of 64.4x forward P/E. Check out our free in-depth research report to learn more about why NEO doesn’t pass our bar.
One Small-Cap Stock to Watch:
Home Bancshares (HOMB)
Market Cap: $5.40 billion
Founded in Conway, Arkansas in 1998 and growing through strategic acquisitions across the Southeast, Home Bancshares (NYSE: HOMB) operates as the bank holding company for Centennial Bank, providing commercial and retail banking services to businesses and individuals across multiple states.
Why Could HOMB Be a Winner?
- Annual revenue growth of 9.4% over the last five years was superb and indicates its market share increased during this cycle
- Differentiated product suite leads to a Strong performance of its loan book is reflected in its High-yielding loan book and low cost of funds result in a premier net interest margin of 4.4%
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 4.8% exceeded its revenue gains over the last two years
Home Bancshares is trading at $27.48 per share, or 1.3x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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