Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names. But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses.
Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. Keeping that in mind, here are three Russell 2000 stocks to steer clear of and some alternatives to watch instead.
Bark (BARK)
Market Cap: $74.92 million
Making a name for itself with the BarkBox, Bark (NYSE: BARK) specializes in subscription-based, personalized pet products.
Why Do We Steer Clear of BARK?
- Sales trends were unexciting over the last five years as its 5.2% annual growth was below the typical consumer discretionary company
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Bark is trading at $8.67 per share, or 24.4x forward EV-to-EBITDA. To fully understand why you should be careful with BARK, check out our full research report (it’s free).
BrightView (BV)
Market Cap: $1.19 billion
An official field consultant for Major League Baseball, BrightView (NYSE: BV) offers landscaping design, development, and maintenance.
Why Should You Dump BV?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.4% annually over the last two years
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Low returns on capital reflect management’s struggle to allocate funds effectively
At $12.79 per share, BrightView trades at 18.2x forward P/E. Read our free research report to see why you should think twice about including BV in your portfolio.
OPENLANE (OPLN)
Market Cap: $3.71 billion
Facilitating the sale of approximately 1.3 million used vehicles in 2023, OPENLANE (NYSE: OPLN) operates digital marketplaces that connect sellers and buyers of used vehicles across North America and Europe, facilitating wholesale transactions.
Why Are We Hesitant About OPLN?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
- High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens
OPENLANE’s stock price of $35.04 implies a valuation ratio of 24.7x forward P/E. If you’re considering OPLN for your portfolio, see our FREE research report to learn more.
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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
