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.

Our 80,000 qualified print subscribers—and 130,000 12-month engaged online audience—trust us to dive in and provide original journalism you won’t find elsewhere covering key emerging areas such as laser-driven inertial confinement fusion, lasers in space, integrated photonics, chipscale lasers, LiDAR, metasurfaces, high-energy laser weaponry, photonic crystals, and quantum computing/sensors/communications. We cover the innovations driving these markets.

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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

3 Russell 2000 Stocks Walking a Fine Line

PTON Cover Image

The Russell 2000 (^RUT) is packed with potential breakout stocks, thanks to its focus on smaller companies with high growth potential. However, smaller size also means these businesses often lack the resilience and financial flexibility of large-cap firms, making careful selection crucial.

The high-risk, high-reward nature of the Russell 2000 makes stock selection critical, and we’re here to guide you toward the right ones. Keeping that in mind, here are three Russell 2000 stocks to avoid and better alternatives to consider.

Peloton (PTON)

Market Cap: $3.09 billion

Started as a Kickstarter campaign, Peloton (NASDAQ: PTON) is a fitness technology company known for its at-home exercise equipment and interactive online workout classes.

Why Do We Steer Clear of PTON?

  1. Demand for its offerings was relatively low as its number of connected fitness subscribers has underwhelmed
  2. Persistent operating margin losses suggest the business manages its expenses poorly
  3. Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 2.7 percentage points over the next year

Peloton’s stock price of $7.59 implies a valuation ratio of 8.5x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than PTON.

Boise Cascade (BCC)

Market Cap: $3.32 billion

Formed through the merger of two lumber companies, Boise Cascade Company (NYSE: BCC) manufactures and distributes wood products and other building materials.

Why Do We Think BCC Will Underperform?

  1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.2% annually over the last two years
  2. Free cash flow margin dropped by 5.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
  3. Waning returns on capital imply its previous profit engines are losing steam

At $88.85 per share, Boise Cascade trades at 13.1x forward P/E. To fully understand why you should be careful with BCC, check out our full research report (it’s free).

Benchmark (BHE)

Market Cap: $1.47 billion

Operating as a critical behind-the-scenes partner for complex technology products since 1979, Benchmark Electronics (NYSE: BHE) provides advanced manufacturing, engineering, and technology solutions for original equipment manufacturers across aerospace, medical, industrial, and technology sectors.

Why Are We Hesitant About BHE?

  1. Customers postponed purchases of its products and services this cycle as its revenue declined by 6.3% annually over the last two years
  2. Low free cash flow margin of 0.8% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
  3. Underwhelming 7.3% return on capital reflects management’s difficulties in finding profitable growth opportunities

Benchmark is trading at $40.95 per share, or 16.5x forward P/E. If you’re considering BHE for your portfolio, see our FREE research report to learn more.

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