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.
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.
Wix (WIX)
Market Cap: $1.84 billion
Powering over 263 million registered users worldwide with its AI-driven tools, Wix (NASDAQ: WIX) provides a cloud-based platform that helps individuals and businesses create and manage professional websites without requiring coding skills.
Why Do We Think Twice About WIX?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 13.8% underwhelmed
- Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 12.2 percentage points
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 10.3 percentage points
Wix is trading at $48.82 per share, or 1.2x forward price-to-sales. Check out our free in-depth research report to learn more about why WIX doesn’t pass our bar.
Fiverr (FVRR)
Market Cap: $354.5 million
Based in Tel Aviv, Fiverr (NYSE: FVRR) operates a fixed price global freelance marketplace for digital services.
Why Are We Hesitant About FVRR?
- Value proposition isn’t resonating strongly as its active buyers averaged 12.3% drops over the last two years
- Projected sales decline of 7% for the next 12 months points to a tough demand environment ahead
- Highly competitive market means it’s on the never-ending treadmill of sales and marketing spend
At $10.97 per share, Fiverr trades at 1.2x forward price-to-gross profit. Dive into our free research report to see why there are better opportunities than FVRR.
1-800-FLOWERS (FLWS)
Market Cap: $271.1 million
Founded in 1976, 1-800-FLOWERS (NASDAQ: FLWS) is an online retailer of flowers, gifts, and gourmet foods, serving customers globally.
Why Do We Avoid FLWS?
- Annual sales declines of 5.5% for the past five years show its products and services struggled to connect with the market
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
1-800-FLOWERS’s stock price of $3.81 implies a valuation ratio of 0.2x forward price-to-sales. To fully understand why you should be careful with FLWS, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
