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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Wabash (WNC)
Market Cap: $330.4 million
With its first trailer reportedly built on two sawhorses, Wabash (NYSE: WNC) offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods.
Why Are We Out on WNC?
- Sales pipeline suggests its future revenue growth won’t meet our standards as its backlog averaged 28.7% declines over the past two years
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Wabash is trading at $8.20 per share, or 30.8x forward EV-to-EBITDA. To fully understand why you should be careful with WNC, check out our full research report (it’s free).
agilon health (AGL)
Market Cap: $248.9 million
Transforming how doctors care for seniors by shifting financial incentives from volume to outcomes, agilon health (NYSE: AGL) provides a platform that helps primary care physicians transition to value-based care models for Medicare patients through long-term partnerships and global capitation arrangements.
Why Does AGL Give Us Pause?
- Forecasted revenue decline of 8% for the upcoming 12 months implies demand will fall off a cliff
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 3.6 percentage points
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
agilon health’s stock price of $0.60 implies a valuation ratio of 0x forward price-to-sales. Dive into our free research report to see why there are better opportunities than AGL.
Avnet (AVT)
Market Cap: $4.89 billion
With a century-long history of adapting to technological evolution, Avnet (NASDAQ: AVT) is a global electronic components distributor that connects manufacturers of semiconductors and other electronic parts with businesses that need these components.
Why Does AVT Fall Short?
- Annual sales declines of 4.9% for the past two years show its products and services struggled to connect with the market during this cycle
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Poor free cash flow margin of -0.2% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $59.82 per share, Avnet trades at 10.6x forward P/E. Check out our free in-depth research report to learn more about why AVT doesn’t pass our bar.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
