The Russell 2000 (^RUT) is packed with potential breakout stocks, thanks to its focus on smaller companies with high growth potential. However, smaller size also means these businesses often lack the resilience and financial flexibility of large-cap firms, making careful selection crucial.
Picking the right small caps isn’t easy, and that’s exactly why StockStory exists - to help you focus on the best opportunities. Keeping that in mind, here is one Russell 2000 stock that could be a breakout winner and two that may struggle to keep up.
Two Stocks to Sell:
Janus (JBI)
Market Cap: $1.44 billion
Standing out with its digital keyless entry into self-storage room technology, Janus (NYSE: JBI) is a provider of easily accessible self-storage solutions.
Why Do We Think Twice About JBI?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Sales are projected to be flat over the next 12 months and imply weak demand
- Earnings per share have contracted by 13.8% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
Janus’s stock price of $10.37 implies a valuation ratio of 7.4x forward EV-to-EBITDA. If you’re considering JBI for your portfolio, see our FREE research report to learn more.
Byrna (BYRN)
Market Cap: $445.4 million
Providing civilians with tools to disable, disarm, and deter would-be assailants, Byrna (NASDAQ: BYRN) is a provider of non-lethal weapons.
Why Does BYRN Give Us Pause?
- Persistent operating margin losses suggest the business manages its expenses poorly
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
At $19.60 per share, Byrna trades at 44.7x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than BYRN.
One Stock to Watch:
FirstSun Capital Bancorp (FSUN)
Market Cap: $1.07 billion
Tracing its roots back to 1892 when it first opened its doors in Kansas, FirstSun Capital Bancorp (NASDAQ: FSUN) operates Sunflower Bank, providing commercial and consumer banking services to businesses and individuals across the Southwest region.
Why Are We Fans of FSUN?
- Annual net interest income growth of 18.7% over the last five years was superb and indicates its market share increased during this cycle
- Non-interest operating profits and efficiency rose over the last four years as it benefited from some fixed cost leverage
- Impressive 8.8% annual tangible book value per share growth over the last four years indicates it’s building equity value this cycle
FirstSun Capital Bancorp is trading at $38.42 per share, or 0.9x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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