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.
Tilly's (TLYS)
Market Cap: $48.45 million
With an emphasis on skate and surf culture, Tilly’s (NYSE: TLYS) is a specialty retailer that sells clothing, footwear, and accessories geared towards fashion-forward teens and young adults.
Why Should You Sell TLYS?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Earnings per share decreased by more than its revenue over the last six years, showing each sale was less profitable
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Tilly's is trading at $1.59 per share, or 0.1x forward price-to-sales. To fully understand why you should be careful with TLYS, check out our full research report (it’s free for active Edge members).
Organon (OGN)
Market Cap: $2.40 billion
Spun off from Merck in 2021 to create a company dedicated to addressing unmet needs in women's health, Organon (NYSE: OGN) is a global healthcare company focused on improving women's health through prescription therapies, medical devices, biosimilars, and established medicines.
Why Does OGN Give Us Pause?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.6% annually over the last five years
- Sales were less profitable over the last five years as its earnings per share fell by 18.5% annually, worse than its revenue declines
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 25.6 percentage points
At $9.28 per share, Organon trades at 2.4x forward P/E. If you’re considering OGN for your portfolio, see our FREE research report to learn more.
Perella Weinberg (PWP)
Market Cap: $1.24 billion
Founded in 2006 by veteran investment bankers Joseph Perella and Peter Weinberg during a wave of boutique advisory firm launches, Perella Weinberg Partners (NASDAQ: PWP) is a global independent advisory firm that provides strategic and financial advice to corporations, financial sponsors, and government institutions.
Why Are We Hesitant About PWP?
- Earnings per share were flat over the last three years and fell short of the peer group average
- Negative return on equity shows management lost money while trying to expand the business
Perella Weinberg’s stock price of $19.05 implies a valuation ratio of 18.1x forward P/E. Check out our free in-depth research report to learn more about why PWP doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
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 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-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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