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.
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. That said, here is one small-cap stock that could be the next 100 bagger and two best left ignored.
Two Small-Cap Stocks to Sell:
Redwire (RDW)
Market Cap: $1.30 billion
Based in Jacksonville, Florida, Redwire (NYSE: RDW) is a provider of systems and components used in space infrastructure.
Why Should You Sell RDW?
- Historically negative EPS raises concerns for risk-averse investors and makes its earnings potential harder to gauge
- 27.3 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
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Redwire is trading at $9.10 per share, or 10.2x forward EV-to-EBITDA. If you’re considering RDW for your portfolio, see our FREE research report to learn more.
Privia Health (PRVA)
Market Cap: $2.74 billion
Operating in 13 states and the District of Columbia with over 4,300 providers serving more than 4.8 million patients, Privia Health (NASDAQ: PRVA) is a technology-driven company that helps physicians optimize their practices, improve patient experiences, and transition to value-based care models.
Why Does PRVA Give Us Pause?
- Subscale operations are evident in its revenue base of $1.9 billion, meaning it has fewer distribution channels than its larger rivals
- Poor free cash flow margin of 4.3% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Push for growth has led to negative returns on capital, signaling value destruction
At $22.32 per share, Privia Health trades at 25.2x forward P/E. To fully understand why you should be careful with PRVA, check out our full research report (it’s free).
One Small-Cap Stock to Watch:
Globus Medical (GMED)
Market Cap: $7.81 billion
With operations spanning 64 countries and a portfolio of over 10 new products launched in 2023 alone, Globus Medical (NYSE: GMED) develops and sells implantable devices, surgical instruments, and technology solutions for spine, orthopedic, and neurosurgical procedures.
Why Does GMED Stand Out?
- Constant currency growth averaged 62.3% over the past two years, showing it can expand globally regardless of the macroeconomic environment
- Forecasted revenue growth of 14% for the next 12 months indicates its momentum over the last two years is sustainable
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 20.2% annually
Globus Medical’s stock price of $57.84 implies a valuation ratio of 16.9x 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
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 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-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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