Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.
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. Keeping that in mind, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Appian (APPN)
Market Cap: $2.21 billion
Powering billions of transactions daily since its founding in 1999, Appian (NASDAQ: APPN) provides a low-code platform that helps businesses automate complex processes and operationalize artificial intelligence without extensive programming knowledge.
Why Does APPN Fall Short?
- Sales trends were unexciting over the last two years as its 13.9% annual growth was below the typical software company
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
- Poor free cash flow margin of 7% for the last year limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $28.74 per share, Appian trades at 3x forward price-to-sales. Check out our free in-depth research report to learn more about why APPN doesn’t pass our bar.
Stratasys (SSYS)
Market Cap: $970.9 million
Born from the Founder’s idea of making a toy frog with a glue gun, Stratasys (NASDAQ: SSYS) offers 3D printers and related materials, software, and services to many industries.
Why Do We Avoid SSYS?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
- Poor expense management has led to operating margin losses
- Free cash flow margin shrank by 6.9 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Stratasys’s stock price of $10.91 implies a valuation ratio of 79.7x forward P/E. If you’re considering SSYS for your portfolio, see our FREE research report to learn more.
BrightView (BV)
Market Cap: $1.23 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 1.7% 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
- 5.1 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
BrightView is trading at $12.90 per share, or 15.7x forward P/E. Read our free research report to see why you should think twice about including BV in your portfolio.
Stocks We Like More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 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-micro-cap company Tecnoglass (+1,754% 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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