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. 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:
Coursera (COUR)
Market Cap: $1.98 billion
Founded by two Stanford University computer science professors, Coursera (NYSE: COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.
Why Are We Wary of COUR?
- Focus on expanding its platform came at the expense of monetization as its average revenue per customer fell by 6.4% annually
- Estimated sales growth of 5.6% for the next 12 months implies demand will slow from its three-year trend
- High marketing expenses suggest it needs to spend heavily on new customer acquisition to sustain momentum
Coursera’s stock price of $12.09 implies a valuation ratio of 37.9x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than COUR.
Omnicell (OMCL)
Market Cap: $1.43 billion
Driven by the vision of an "Autonomous Pharmacy" with zero medication errors, Omnicell (NASDAQ: OMCL) provides medication management automation and adherence tools that help healthcare systems and pharmacies reduce errors and improve efficiency.
Why Should You Dump OMCL?
- Sales tumbled by 3.5% annually over the last two years, showing market trends are working against its favor during this cycle
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 6.1% annually while its revenue grew
- 13.1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Omnicell is trading at $30.64 per share, or 21.5x forward P/E. To fully understand why you should be careful with OMCL, check out our full research report (it’s free).
One Small-Cap Stock to Buy:
Customers Bancorp (CUBI)
Market Cap: $1.93 billion
Originally founded with a "high-tech, high-touch" branch-light banking strategy, Customers Bancorp (NYSE: CUBI) is a bank holding company that provides commercial and consumer banking services through its Customers Bank subsidiary, with a focus on business lending and digital banking.
Why Are We Backing CUBI?
- Market share has increased this cycle as its 14.7% annual net interest income growth over the last five years was exceptional
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 20.7% over the last five years outstripped its revenue performance
- Balance sheet strength has increased this cycle as its 18% annual tangible book value per share growth over the last five years was exceptional
At $61.21 per share, Customers Bancorp trades at 1.1x forward P/B. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
Donald Trump’s April 2024 "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 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-micro-cap company Kadant (+351% 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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