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.

The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.

GoPro (GPRO)

Market Cap: $368.6 million

Known for sponsoring extreme athletes, GoPro (NASDAQ: GPRO) is a camera company known for its POV videos and editing software.

Why Do We Think GPRO Will Underperform?

1. Annual sales declines of 3.9% for the past five years show its products and services struggled to connect with the market
2. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

GoPro is trading at $2.33 per share, or 0.5x trailing 12-month price-to-sales. If you’re considering GPRO for your portfolio, see our FREE research report to learn more.

Matrix Service (MTRX)

Market Cap: $358.7 million

Founded in Oklahoma, Matrix Service (NASDAQ: MTRX) provides engineering, fabrication, construction, and maintenance services primarily to the energy and industrial markets.

Why Are We Out on MTRX?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 6.9% annually over the last five years
2. Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 3.9%
3. Performance over the past five years was negatively impacted by new share issuances as its earnings per share dropped by 34.8% annually, worse than its revenue

Matrix Service’s stock price of $12.78 implies a valuation ratio of 20.5x forward P/E. Dive into our free research report to see why there are better opportunities than MTRX.

United Community Banks (UCB)

Market Cap: $3.80 billion

Starting as a small community bank in 1950 and expanding through strategic acquisitions across the Southeast, United Community Banks (NYSE: UCB) is a regional bank holding company that provides financial services including loans, deposits, wealth management, and merchant services across the southeastern United States.

Why Are We Wary of UCB?

1. Sales trends were unexciting over the last two years as its 1.2% annual growth was below the typical banking company
2. Net interest margin of 3.3% reflects its high servicing and capital costs
3. Costs have risen faster than its revenue over the last four years, causing its efficiency ratio to worsen by 3.2 percentage points

At $31.25 per share, United Community Banks trades at 1x forward P/B. Check out our free in-depth research report to learn more about why UCB doesn’t pass our bar.

Stocks We Like More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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 Kadant (+351% 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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