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. That said, here is one small-cap stock that could be the next 100 bagger and two that may have trouble.

Two Small-Cap Stocks to Sell:

Light & Wonder (LNW)

Market Cap: $8.48 billion

With names as crazy as Ultimate Fire Link Power 4 for its products, Light & Wonder (NASDAQ: LNW) is a gaming company supplying the casino industry with slot machines, table games, and digital games.

Why Is LNW Not Exciting?

1. Sales stagnated over the last five years and signal the need for new growth strategies
2. Anticipated sales growth of 9.9% for the next year implies demand will be shaky
3. ROIC of 8.1% reflects management’s challenges in identifying attractive investment opportunities

At $101 per share, Light & Wonder trades at 17.3x forward P/E. Read our free research report to see why you should think twice about including LNW in your portfolio.

Bally's (BALY)

Market Cap: $543.6 million

Headquartered in Providence, Rhode Island, Bally's Corporation (NYSE: BALY) is a diversified global casino-entertainment company that owns and manages casinos, resorts, and online gaming platforms.

Why Do We Pass on BALY?

1. Annual revenue growth of 2.9% over the last two years was below our standards for the consumer discretionary sector
2. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

Bally’s stock price of $11.09 implies a valuation ratio of 2.1x forward EV-to-EBITDA. If you’re considering BALY for your portfolio, see our FREE research report to learn more.

One Small-Cap Stock to Buy:

Chart (GTLS)

Market Cap: $7.64 billion

Installing the first bulk Co2 tank for McDonalds’s sodas, Chart (NYSE: GTLS) provides equipment to store and transport gasses.

Why Will GTLS Beat the Market?

1. Backlog has averaged 41.6% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
2. Operating margin improvement of 7.3 percentage points over the last five years demonstrates its ability to scale efficiently
3. Earnings growth has trumped its peers over the last two years as its EPS has compounded at 28.7% annually

Chart is trading at $169.20 per share, or 13.1x forward P/E. Is now the right time to buy? See for yourself in our comprehensive 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 Growth Stocks for this month. 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. 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.