1 Small-Cap Stock with Competitive Advantages and 2 We Turn Down

October 09, 2025 at 09:21 AM EDT

CFLT Cover Image

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.

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 100 bagger and two that could be down big.

Two Small-Cap Stocks to Sell:

Haemonetics (HAE)

Market Cap: $2.46 billion

With roots dating back to 1971 and a mission to improve blood-related healthcare, Haemonetics (NYSE: HAE) provides specialized medical devices and software for blood collection, processing, and management across plasma centers, blood banks, and hospitals.

Why Is HAE Not Exciting?

Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
Smaller revenue base of $1.35 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
Projected sales decline of 3% for the next 12 months points to a tough demand environment ahead

Haemonetics is trading at $51.15 per share, or 10.3x forward P/E. Dive into our free research report to see why there are better opportunities than HAE.

Amneal (AMRX)

Market Cap: $3.29 billion

Founded in 2002 and growing into one of America's largest generic drug producers, Amneal Pharmaceuticals (NASDAQ: AMRX) develops, manufactures, and distributes generic medicines, specialty branded drugs, biosimilars, and injectable products for the U.S. healthcare market.

Why Are We Hesitant About AMRX?

Below-average returns on capital indicate management struggled to find compelling investment opportunities

Amneal’s stock price of $10.48 implies a valuation ratio of 14.7x forward P/E. Check out our free in-depth research report to learn more about why AMRX doesn’t pass our bar.

One Small-Cap Stock to Watch:

Confluent (CFLT)

Market Cap: $7.69 billion

Built by the original creators of Apache Kafka, the popular open-source messaging system, Confluent (NASDAQ: CFLT) provides a data infrastructure platform that enables organizations to connect their applications, systems, and data layers around real-time data streams.

Why Are We Fans of CFLT?

Average billings growth of 32.6% over the last year enhances its liquidity and shows there is steady demand for its products
Projected revenue growth of 16.2% for the next 12 months suggests its momentum from the last two years will persist
Above-average gross margin of 74.2% gives it the ability to invest in R&D and run marketing campaigns

At $22.44 per share, Confluent trades at 6.1x forward price-to-sales. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.

Stocks We Like Even More

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 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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