3 Small-Cap Stocks That Fall Short

August 13, 2025 at 00:33 AM EDT

RNG Cover Image

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.

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 are three small-cap stocks to swipe left on and some alternatives you should look into instead.

RingCentral (RNG)

Market Cap: $2.52 billion

Founded in 1999 during the dot-com era, RingCentral (NYSE: RNG) provides software as a service that unifies phone, text, fax, video calls and chat in one platform.

Why Is RNG Risky?

Products, pricing, or go-to-market strategy may need some adjustments as its 5% average billings growth over the last year was weak
Estimated sales growth of 5% for the next 12 months implies demand will slow from its three-year trend
Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue

At $27.27 per share, RingCentral trades at 1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than RNG.

Torrid (CURV)

Market Cap: $224.9 million

Promoting a message of body positivity and inclusiveness, Torrid Holdings (NYSE: CURV) is a plus-size women’s apparel and accessories retailer.

Why Should You Dump CURV?

Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
Sales are projected to tank by 5.8% over the next 12 months as demand evaporates
Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term

Torrid is trading at $2.20 per share, or 17x forward P/E. Read our free research report to see why you should think twice about including CURV in your portfolio.

ICU Medical (ICUI)

Market Cap: $2.72 billion

Founded in 1984 and named for its initial focus on intensive care units, ICU Medical (NASDAQ: ICUI) develops and manufactures medical products for infusion therapy, vascular access, and vital care applications used in hospitals and other healthcare settings.

Why Do We Steer Clear of ICUI?

Muted 1.3% annual revenue growth over the last two years shows its demand lagged behind its healthcare peers
Forecasted revenue decline of 11% for the upcoming 12 months implies demand will fall off a cliff
Earnings per share fell by 19.1% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable

ICU Medical’s stock price of $129.42 implies a valuation ratio of 14.9x forward P/E. If you’re considering ICUI for your portfolio, see our FREE research report to learn more.

Stocks We Like More

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Take advantage of the rebound 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-small-cap company Comfort Systems (+782% 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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3 Small-Cap Stocks That Fall Short

RingCentral (RNG)

Torrid (CURV)

ICU Medical (ICUI)

Stocks We Like More

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