Investors looking for hidden gems should keep an eye on small-cap stocks because they’re frequently overlooked by Wall Street. Many opportunities exist in this part of the market, but it is also a high-risk, high-reward environment due to the lack of reliable analyst price targets.

Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here is one small-cap stock that could be the next 100 bagger and two that could be down big.

Two Small-Cap Stocks to Sell:

Proto Labs (PRLB)

Market Cap: $1.17 billion

Pioneering the concept of online quoting and manufacturing for custom prototypes and low-volume production parts, Proto Labs (NYSE: PRLB) offers injection molding, 3D printing, and sheet metal fabrication for manufacturers in various industries.

Why Do We Pass on PRLB?

1. Muted 2.4% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
2. Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 7.6 percentage points
3. Earnings per share have dipped by 9.3% annually over the past five years, which is concerning because stock prices follow EPS over the long term

At $49.18 per share, Proto Labs trades at 33.2x forward P/E. Dive into our free research report to see why there are better opportunities than PRLB.

Bausch + Lomb (BLCO)

Market Cap: $5.09 billion

With a nearly 170-year history dedicated to vision care and eye health innovation, Bausch + Lomb (NYSE: BLCO) develops and manufactures a comprehensive range of eye health products including contact lenses, pharmaceuticals, surgical devices, and consumer eye care solutions.

Why Do We Think Twice About BLCO?

1. Muted 7.2% annual revenue growth over the last five years shows its demand lagged behind its healthcare peers
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 23.9 percentage points
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

Bausch + Lomb is trading at $14.37 per share, or 17x forward P/E. To fully understand why you should be careful with BLCO, check out our full research report (it’s free).

One Small-Cap Stock to Watch:

Ollie's (OLLI)

Market Cap: $8.19 billion

Often located in suburban or semi-rural shopping centers, Ollie’s Bargain Outlet (NASDAQ: OLLI) is a discount retailer that acquires excess inventory then sells at meaningful discounts.

Why Is OLLI Interesting?

1. Offensive push to build new stores and attack its untapped market opportunities is backed by its same-store sales growth
2. Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 3.7% over the past two years
3. Market share is on track to rise over the next 12 months as its 15.6% projected revenue growth implies demand will accelerate from its six-year trend

Ollie’s stock price of $133.65 implies a valuation ratio of 33.1x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. 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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