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. That said, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.

Chegg (CHGG)

Market Cap: $138.7 million

Started as a physical textbook rental service, Chegg (NYSE: CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.

Why Do We Steer Clear of CHGG?

1. Services Subscribers have declined by 17.3% annually over the last two years, suggesting it may need to revamp its features or user experience to stay competitive
2. Overall productivity fell over the last few years as its plummeting sales were accompanied by a decline in its EBITDA margin
3. Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 38.2% annually, worse than its revenue

At $1.29 per share, Chegg trades at 1.7x forward EV/EBITDA. Check out our free in-depth research report to learn more about why CHGG doesn’t pass our bar.

Allient (ALNT)

Market Cap: $782.4 million

Founded in 1962, Allient (NASDAQ: ALNT) develops and manufactures precision and specialty-controlled motion components and systems.

Why Does ALNT Fall Short?

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. Earnings per share decreased by more than its revenue over the last two years, partly because it diluted shareholders
3. Underwhelming 8% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging

Allient’s stock price of $46.17 implies a valuation ratio of 22.3x forward P/E. Read our free research report to see why you should think twice about including ALNT in your portfolio.

Arrow Electronics (ARW)

Market Cap: $6.56 billion

Founded as a single retail store, Arrow Electronics (NYSE: ARW) provides electronic components and enterprise computing solutions to businesses globally.

Why Do We Avoid ARW?

1. Sales tumbled by 10.8% annually over the last two years, showing market trends are working against its favor during this cycle
2. Sales were less profitable over the last two years as its earnings per share fell by 32.9% annually, worse than its revenue declines
3. Diminishing returns on capital suggest its earlier profit pools are drying up

Arrow Electronics is trading at $127.40 per share, or 5.1x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than ARW.

High-Quality Stocks for All Market Conditions

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum 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-small-cap company Exlservice (+354% 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.