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.

Shutterstock (SSTK)

Market Cap: $764.1 million

Originally featuring a library that included many of founder Jon Oringer’s photos, Shutterstock (NYSE: SSTK) is now a digital platform where customers can license and use hundreds of millions of pieces of content.

Why Does SSTK Fall Short?

1. Preference for prioritizing user growth over monetization has led to 5.4% annual drops in its average revenue per request
2. Estimated sales growth of 1.6% for the next 12 months implies demand will slow from its three-year trend
3. Capital intensity has ramped up over the last few years as its free cash flow margin decreased by 16.5 percentage points

Shutterstock is trading at $21.54 per share, or 6x forward EV/EBITDA. To fully understand why you should be careful with SSTK, check out our full research report (it’s free).

Plexus (PLXS)

Market Cap: $3.73 billion

With over 20,000 team members across 26 global facilities, Plexus (NASDAQ: PLXS) designs, manufactures, and services complex electronic products for companies in aerospace/defense, healthcare, and industrial sectors.

Why Is PLXS Not Exciting?

1. Annual sales declines of 3.4% for the past two years show its products and services struggled to connect with the market during this cycle
2. Poor free cash flow margin of 2.7% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $139.21 per share, Plexus trades at 18.6x forward P/E. Check out our free in-depth research report to learn more about why PLXS doesn’t pass our bar.

Peoples Bancorp (PEBO)

Market Cap: $1.05 billion

Founded in 1902 in Ohio and expanding through both organic growth and acquisitions, Peoples Bancorp (NASDAQ: PEBO) is a financial holding company that provides banking, insurance, equipment leasing, and investment services to consumers and businesses.

Why Are We Hesitant About PEBO?

1. Estimated net interest income growth of 1.8% for the next 12 months implies demand will slow from its five-year trend
2. Net interest margin shrank by 23.3 basis points (100 basis points = 1 percentage point) over the last two years, suggesting the profitability of its loan book is decreasing or the market is becoming more competitive
3. Muted 1.4% annual tangible book value per share growth over the last five years shows its capital generation lagged behind its banking peers

Peoples Bancorp’s stock price of $30.14 implies a valuation ratio of 0.9x forward P/B. Dive into our free research report to see why there are better opportunities than PEBO.

Stocks We Like More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

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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