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1 Small-Cap Stock with Solid Fundamentals and 2 We Question

By: StockStory

October 02, 2025 at 00:35 AM EDT

AZZ Cover Image

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. That said, 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:

ScanSource (SCSC)

Market Cap: $959 million

Operating as a crucial link in the technology supply chain since 1992, ScanSource (NASDAQ: SCSC) is a hybrid distributor that connects hardware, software, and cloud services from technology suppliers to resellers and business customers.

Why Should You Dump SCSC?

Sales tumbled by 11.4% annually over the last two years, showing market trends are working against its favor during this cycle
Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
Underwhelming 8.1% return on capital reflects management’s difficulties in finding profitable growth opportunities

ScanSource is trading at $43.43 per share, or 11.6x forward P/E. Read our free research report to see why you should think twice about including SCSC in your portfolio.

NBT Bancorp (NBTB)

Market Cap: $2.17 billion

Tracing its roots back to 1856 when it first opened its doors in Norwich, New York, NBT Bancorp (NASDAQ: NBTB) is a community-oriented financial institution providing banking, wealth management, and insurance services to individuals and businesses across the northeastern United States.

Why Do We Think Twice About NBTB?

Net interest margin of 3.3% is well below other banks, signaling its loans aren’t very profitable
Annual earnings per share growth of 3.4% underperformed its revenue over the last five years, showing its incremental sales were less profitable
Estimated tangible book value per share growth of 3.7% for the next 12 months implies profitability will slow from its two-year trend

At $41.43 per share, NBT Bancorp trades at 1.2x forward P/B. Check out our free in-depth research report to learn more about why NBTB doesn’t pass our bar.

One Small-Cap Stock to Watch:

AZZ (AZZ)

Market Cap: $3.27 billion

Responsible for projects like nuclear facilities, AZZ (NYSE: AZZ) is a provider of metal coating and power infrastructure solutions.

Why Are We Positive On AZZ?

Highly efficient business model is illustrated by its impressive 14.7% operating margin, and its operating leverage amplified its profits over the last five years
Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 24.5% outpaced its revenue gains
Free cash flow margin grew by 13.5 percentage points over the last five years, giving the company more chips to play with

AZZ’s stock price of $109.07 implies a valuation ratio of 18x forward P/E. Is now the time to initiate a position? 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 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 Comfort Systems (+782% 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.

Symbol	Price	Change (%)
AMZN	230.30	+1.05 (0.46%)
AAPL	269.70	+0.70 (0.26%)
AMD	264.33	+6.32 (2.45%)
BAC	52.58	-0.29 (-0.55%)
GOOG	275.17	+6.74 (2.51%)
META	751.67	+0.23 (0.03%)
MSFT	541.55	-0.52 (-0.10%)
NVDA	207.04	+6.01 (2.99%)
ORCL	275.30	-5.53 (-1.97%)
TSLA	461.51	+0.96 (0.21%)

Symbol

Price

Change (%)

AMZN

230.30

+1.05 (0.46%)

AAPL

269.70

+0.70 (0.26%)

AMD

264.33

+6.32 (2.45%)

BAC

52.58

-0.29 (-0.55%)

GOOG

275.17

+6.74 (2.51%)

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