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 is one small-cap stock that could be the next big thing and two best left ignored.
Two Small-Cap Stocks to Sell:
fuboTV (FUBO)
Market Cap: $1.18 billion
Originally launched as a soccer streaming platform, fuboTV (NYSE: FUBO) is a video streaming service specializing in live sports, news, and entertainment content.
Why Do We Steer Clear of FUBO?
- Demand for its offerings was relatively low as its number of domestic subscribers has underwhelmed
- Historical operating margin losses point to an inefficient cost structure
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 6.5 percentage points
fuboTV’s stock price of $3.46 implies a valuation ratio of 74.2x forward P/E. To fully understand why you should be careful with FUBO, check out our full research report (it’s free).
Masimo (MASI)
Market Cap: $7.78 billion
Founded in 1989 to solve the "unsolvable problem" of accurate pulse oximetry during patient movement, Masimo (NASDAQ: MASI) develops and manufactures noninvasive patient monitoring technologies, including its breakthrough pulse oximetry systems that accurately measure blood oxygen levels even during patient movement.
Why Does MASI Give Us Pause?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 18.4% annually over the last two years
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Masimo is trading at $142.68 per share, or 28.7x forward P/E. Read our free research report to see why you should think twice about including MASI in your portfolio.
One Small-Cap Stock to Buy:
GitLab (GTLB)
Market Cap: $7.23 billion
With its all-remote workforce pioneering a new approach to software development, GitLab (NASDAQ: GTLB) provides a single-application DevSecOps platform that helps development, operations, and security teams collaborate to build, secure, and deploy software faster.
Why Are We Bullish on GTLB?
- ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
- Prominent and differentiated software leads to a best-in-class gross margin of 88.6%
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
At $45.60 per share, GitLab trades at 7.3x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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 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-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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