Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings. However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Yelp (YELP)
Market Cap: $1.78 billion
Founded by PayPal alumni Jeremy Stoppelman and Russel Simmons, Yelp (NYSE: YELP) is an online platform that helps people discover local businesses through crowd-sourced reviews.
Why Does YELP Fall Short?
- May need to improve its platform and marketing strategy as its 7.4% average growth in paying advertising accounts underwhelmed
- Underwhelming performance in both user spending and platform engagement suggests its platform is becoming less effective
- Estimated sales growth of 1.1% for the next 12 months implies demand will slow from its three-year trend
Yelp’s stock price of $28.88 implies a valuation ratio of 5.3x forward EV/EBITDA. If you’re considering YELP for your portfolio, see our FREE research report to learn more.
BrightView (BV)
Market Cap: $1.20 billion
An official field consultant for Major League Baseball, BrightView (NYSE: BV) offers landscaping design, development, and maintenance.
Why Is BV Risky?
- Sales tumbled by 2.6% annually over the last two years, showing market trends are working against its favor during this cycle
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Low returns on capital reflect management’s struggle to allocate funds effectively
At $12.62 per share, BrightView trades at 16.8x forward P/E. Read our free research report to see why you should think twice about including BV in your portfolio.
Bausch + Lomb (BLCO)
Market Cap: $5.73 billion
With a nearly 170-year history dedicated to vision care and eye health innovation, Bausch + Lomb (NYSE: BLCO) develops and manufactures a comprehensive range of eye health products including contact lenses, pharmaceuticals, surgical devices, and consumer eye care solutions.
Why Does BLCO Worry Us?
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 20.4% annually
- 26.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Bausch + Lomb is trading at $16.14 per share, or 19.2x forward P/E. If you’re considering BLCO for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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