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.

The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. Keeping that in mind, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.

Domo (DOMO)

Market Cap: $551.6 million

Founded by Josh James after selling his former business Omniture to Adobe, Domo (NASDAQ: DOMO) provides business intelligence software that allows managers to access and visualize critical business metrics in real-time, using their smartphones.

Why Is DOMO Risky?

1. Customers had second thoughts about committing to its platform over the last year as its billings averaged 2.4% declines
2. Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

At $13.71 per share, Domo trades at 1.7x forward price-to-sales. Read our free research report to see why you should think twice about including DOMO in your portfolio.

Calavo (CVGW)

Market Cap: $493.7 million

A trailblazer in the avocado industry, Calavo Growers (NASDAQ: CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.

Why Do We Avoid CVGW?

1. Products have few die-hard fans as sales have declined by 15.8% annually over the last three years
2. Sales are projected to tank by 1.8% over the next 12 months as its demand continues evaporating
3. Gross margin of 10.5% is below its competitors, leaving less money to invest in areas like marketing and production facilities

Calavo is trading at $27.68 per share, or 14.5x forward P/E. Check out our free in-depth research report to learn more about why CVGW doesn’t pass our bar.

Independent Bank (INDB)

Market Cap: $2.67 billion

Tracing its roots back to 1907 and serving as a financial cornerstone in New England for over a century, Independent Bank Corp. (NASDAQ: INDB) operates as the holding company for Rockland Trust, providing banking, investment, and financial services across Eastern Massachusetts and Rhode Island.

Why Is INDB Not Exciting?

1. Annual sales declines of 3.5% for the past two years show its products and services struggled to connect with the market during this cycle
2. Sales were less profitable over the last two years as its earnings per share fell by 13.1% annually, worse than its revenue declines
3. Tangible book value per share is projected to decrease by 2.3% over the next 12 months as capital generation weakens

Independent Bank’s stock price of $62.71 implies a valuation ratio of 0.9x forward P/B. Read our free research report to see why you should think twice about including INDB in your portfolio.

Stocks We Like More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. 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