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.

Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. Keeping that in mind, here are three Russell 2000 stocks that don’t make the cut and some better choices instead.

Angi (ANGI)

Market Cap: $470.3 million

Created by IAC’s mergers of Angie’s List and HomeAdvisor, ANGI (NASDAQ: ANGI) operates the largest online marketplace for home services in the US.

Why Does ANGI Give Us Pause?

1. Struggled with new customer acquisition as its service requests averaged 20.6% declines
2. Sales are projected to be flat over the next 12 months and imply weak demand
3. High marketing expenses suggest it needs to spend heavily on new customer acquisition to sustain momentum

Angi is trading at $10.90 per share, or 3.2x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than ANGI.

Cadre (CDRE)

Market Cap: $1.64 billion

Originally known as Safariland, Cadre (NYSE: CDRE) specializes in manufacturing and distributing safety and survivability equipment for first responders.

Why Do We Think Twice About CDRE?

1. Estimated sales growth of 6.7% for the next 12 months implies demand will slow from its two-year trend
2. Earnings per share lagged its peers over the last four years as they only grew by 1.8% annually
3. Waning returns on capital imply its previous profit engines are losing steam

Cadre’s stock price of $40.25 implies a valuation ratio of 26.3x forward P/E. Check out our free in-depth research report to learn more about why CDRE doesn’t pass our bar.

American Outdoor Brands (AOUT)

Market Cap: $84.17 million

Spun off from Smith and Wesson in 2020, American Outdoor Brands (NASDAQ: AOUT) is an outdoor and recreational products company that offers outdoor and shooting sports products but does not sell firearms themselves.

Why Do We Avoid AOUT?

1. Muted 2.6% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
2. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

At $6.66 per share, American Outdoor Brands trades at 61.6x forward P/E. To fully understand why you should be careful with AOUT, check out our full research report (it’s free for active Edge members).

Stocks We Like More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% 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

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