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.
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. Keeping that in mind, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Bark (BARK)
Market Cap: $144.6 million
Making a name for itself with the BarkBox, Bark (NYSE: BARK) specializes in subscription-based, personalized pet products.
Why Do We Steer Clear of BARK?
- Sales tumbled by 5.3% annually over the last two years, showing consumer trends are working against its favor
- Poor free cash flow margin of -0.9% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Bark’s stock price of $0.86 implies a valuation ratio of 126.7x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than BARK.
Hillenbrand (HI)
Market Cap: $1.77 billion
Hillenbrand, Inc. (NYSE: HI) is an industrial company that designs, manufactures, and sells highly engineered processing equipment and solutions for various industries.
Why Is HI Risky?
- 3.5% annual revenue growth over the last two years was slower than its industrials peers
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 18.9 percentage points
- Waning returns on capital imply its previous profit engines are losing steam
Hillenbrand is trading at $25.11 per share, or 10.5x forward P/E. If you’re considering HI for your portfolio, see our FREE research report to learn more.
ANI Pharmaceuticals (ANIP)
Market Cap: $1.93 billion
With a diverse portfolio of 116 pharmaceutical products and a growing rare disease platform, ANI Pharmaceuticals (NASDAQ: ANIP) develops, manufactures, and markets branded and generic prescription pharmaceuticals, with a focus on rare disease treatments.
Why Does ANIP Fall Short?
- Subscale operations are evident in its revenue base of $747.4 million, meaning it has fewer distribution channels than its larger rivals
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 5.6 percentage points
- Negative returns on capital show that some of its growth strategies have backfired
At $95.93 per share, ANI Pharmaceuticals trades at 14.9x forward P/E. Dive into our free research report to see why there are better opportunities than ANIP.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking 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 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.
