Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names. But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses.
Picking the right small caps isn’t easy, and that’s exactly why StockStory exists - to help you focus on the best opportunities. That said, here are two Russell 2000 stocks that could deliver strong gains and one best left off your watchlist.
One Stock to Sell:
Mister Car Wash (MCW)
Market Cap: $1.66 billion
Formerly known as Hotshine Holdings, Mister Car Wash (NYSE: MCW) offers car washes across the United States through its conveyorized service.
Why Do We Pass on MCW?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $5.05 per share, Mister Car Wash trades at 10.9x forward P/E. Read our free research report to see why you should think twice about including MCW in your portfolio.
Two Stocks to Watch:
Urban Outfitters (URBN)
Market Cap: $5.34 billion
Founded as a purveyor of vintage items, Urban Outfitters (NASDAQ: URBN) now largely sells new apparel and accessories to teens and young adults seeking on-trend fashion.
Why Do We Like URBN?
- Store expansion strategy is justified by its healthy same-store sales
- Same-store sales growth averaged 4.3% over the past two years, showing it’s bringing new and repeat shoppers into its stores
- Projected revenue growth of 8.4% for the next 12 months indicates demand will rise above its six-year trend
Urban Outfitters’s stock price of $59.38 implies a valuation ratio of 11.5x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
Montrose (MEG)
Market Cap: $887 million
Founded to protect a tree-lined two-lane road, Montrose (NYSE: MEG) provides air quality monitoring, environmental laboratory testing, compliance, and environmental consulting services.
Why Does MEG Stand Out?
- Annual revenue growth of 17.6% over the past two years was outstanding, reflecting market share gains this cycle
- Earnings per share have massively outperformed its peers over the last two years, increasing by 109% annually
- Free cash flow margin increased by 6.6 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Montrose is trading at $25.12 per share, or 21.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
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).
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-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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