Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings. However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.

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 big thing and two that could be down big.

Two Small-Cap Stocks to Sell:

Dole (DOLE)

Market Cap: $1.33 billion

Known for its delicious pineapples and Hawaiian roots, Dole (NYSE: DOLE) is a global agricultural company specializing in fresh fruits and vegetables.

Why Do We Pass on DOLE?

1. Products have few die-hard fans as sales have declined by 3% annually over the last three years
2. Estimated sales for the next 12 months are flat and imply a softer demand environment
3. Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 8.4%

At $13.94 per share, Dole trades at 9.8x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than DOLE.

Alta (ALTG)

Market Cap: $137.7 million

Founded in 1984, Alta Equipment Group (NYSE: ALTG) is a provider of industrial and construction equipment and services across the Midwest and Northeast United States.

Why Are We Hesitant About ALTG?

1. Historically negative EPS is a worrisome sign for conservative investors and obscures its long-term earnings potential
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

Alta is trading at $4.19 per share, or 0.8x forward EV-to-EBITDA. If you’re considering ALTG for your portfolio, see our FREE research report to learn more.

One Small-Cap Stock to Buy:

Byrna (BYRN)

Market Cap: $493.7 million

Providing civilians with tools to disable, disarm, and deter would-be assailants, Byrna (NASDAQ: BYRN) is a provider of non-lethal weapons.

Why Is BYRN a Top Pick?

1. Impressive 40.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 99.2% annually, topping its revenue gains
3. Free cash flow profile has moved into break even territory, showing the company has crossed a key inflection point

Byrna’s stock price of $21.95 implies a valuation ratio of 34.1x forward EV-to-EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.