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. That said, here is one small-cap stock that could be the next 100 bagger and two that may have trouble.
Two Small-Cap Stocks to Sell:
ChargePoint (CHPT)
Market Cap: $156.5 million
The most prominent EV charging company during the COVID bull market, ChargePoint (NYSE: CHPT) is a provider of electric vehicle charging technology solutions in North America and Europe.
Why Does CHPT Worry Us?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 9.9% annually over the last two years
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes
At $6.46 per share, ChargePoint trades at 0.4x forward price-to-sales. Read our free research report to see why you should think twice about including CHPT in your portfolio.
Schneider (SNDR)
Market Cap: $5.23 billion
Employing thousands of drivers across the country to make deliveries, Schneider (NYSE: SNDR) makes full truckload and intermodal deliveries regionally and across borders.
Why Do We Steer Clear of SNDR?
- 2.6% annual revenue growth over the last two years was slower than its industrials peers
- Earnings per share have contracted by 14.9% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Schneider is trading at $30.03 per share, or 30x forward P/E. Check out our free in-depth research report to learn more about why SNDR doesn’t pass our bar.
One Small-Cap Stock to Buy:
CECO Environmental (CECO)
Market Cap: $2.92 billion
With roots dating back to 1869 and a focus on creating cleaner industrial operations, CECO Environmental (NASDAQ: CECO) provides technology and expertise that helps industrial companies reduce emissions, treat water, and improve energy efficiency across various sectors.
Why Is CECO a Good Business?
- Annual revenue growth of 19.9% over the last two years was superb and indicates its market share increased during this cycle
- Market share is on track to rise over the next 12 months as its 23.9% projected revenue growth implies demand will accelerate from its two-year trend
- Share buybacks catapulted its annual earnings per share growth to 23.6%, which outperformed its revenue gains over the last two years
CECO Environmental’s stock price of $80.78 implies a valuation ratio of 48.2x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
