Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

1 Small-Cap Stock to Keep an Eye On and 2 to Avoid

SONO Cover Image

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. Keeping that in mind, here is one small-cap stock that could be the next big thing and two that may have trouble.

Two Small-Cap Stocks to Sell:

Sonos (SONO)

Market Cap: $1.22 billion

A pioneer in connected home audio systems, Sonos (NASDAQ: SONO) offers a range of premium wireless speakers and sound systems.

Why Should You Dump SONO?

  1. Products and services aren't resonating with the market as its revenue declined by 6.3% annually over the last two years
  2. Historical operating margin losses point to an inefficient cost structure
  3. Negative returns on capital show that some of its growth strategies have backfired

Sonos’s stock price of $10.10 implies a valuation ratio of 48.4x forward P/E. Dive into our free research report to see why there are better opportunities than SONO.

Middleby (MIDD)

Market Cap: $7.90 billion

Holding a Guinness World Record for creating the world’s fastest conveyor pizza oven, Middleby (NYSE: MIDD) is a food service and equipment manufacturer.

Why Are We Out on MIDD?

  1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
  2. Anticipated sales growth of 2.2% for the next year implies demand will be shaky
  3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 2.7% annually

Middleby is trading at $146.76 per share, or 14.8x forward P/E. Check out our free in-depth research report to learn more about why MIDD doesn’t pass our bar.

One Small-Cap Stock to Watch:

CECO Environmental (CECO)

Market Cap: $942.4 million

With roots dating back to 1869 and a focus on creating cleaner industrial operations, CECO Environmental (NASDAQ: CECO) provides technology and expertise that helps industrial companies reduce emissions, treat water, and improve energy efficiency across various sectors.

Why Does CECO Stand Out?

  1. Impressive 17.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
  2. Projected revenue growth of 22.6% for the next 12 months is above its two-year trend, pointing to accelerating demand
  3. Adjusted operating margin expanded by 10.8 percentage points over the last five years as it scaled and became more efficient

At $26.75 per share, CECO Environmental trades at 20.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.

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