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.
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. That said, here are two small-cap stocks that could be the next 100 baggers and one that may have trouble.
One Small-Cap Stock to Sell:
Altice (ATUS)
Market Cap: $1.06 billion
Based in Long Island City, Altice USA (NYSE: ATUS) is a telecommunications company offering cable, internet, telephone, and television services across the United States.
Why Should You Dump ATUS?
- Sluggish trends in its broadband subscribers suggest customers aren’t adopting its solutions as quickly as the company hoped
- Sales were less profitable over the last five years as its earnings per share fell by 31.1% annually, worse than its revenue declines
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Altice is trading at $2.30 per share, or 0.3x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why ATUS doesn’t pass our bar.
Two Small-Cap Stocks to Watch:
Primoris (PRIM)
Market Cap: $6.03 billion
Listed on the NASDAQ in 2008, Primoris (NYSE: PRIM) builds, maintains, and upgrades infrastructure in the utility, energy, and civil construction industries.
Why Are We Positive On PRIM?
- Market share has increased this cycle as its 15.9% annual revenue growth over the last five years was exceptional
- Backlog has averaged 159% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 28.6% annually
At $111.70 per share, Primoris trades at 24.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
ESCO (ESE)
Market Cap: $4.92 billion
A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO (NYSE: ESE) is a provider of engineered components for the aerospace, defense, and utility sectors.
Why Do We Love ESE?
- Market share is on track to rise over the next 12 months as its 23.1% projected revenue growth implies demand will accelerate from its two-year trend
- Superior product capabilities and pricing power lead to a stellar gross margin of 39.1%
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 22.4% over the last two years outstripped its revenue performance
ESCO’s stock price of $190.55 implies a valuation ratio of 28.9x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even 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 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 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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