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:
Verra Mobility (VRRM)
Market Cap: $528.9 million
Aiming to wrap technology and data around a historically manual and paper-based industry, Verra Mobility (NASDAQ: VRRM) is a leading provider of smart mobility technology to address tolls and violations, title and registration services, as well as safety and traffic enforcement.
Why Does VRRM Give Us Pause?
- Projected sales decline of 8.8% for the next 12 months points to a tough demand environment ahead
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 9 percentage points
- 21.2 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $3.52 per share, Verra Mobility trades at 3.7x forward P/E. Check out our free in-depth research report to learn more about why VRRM doesn’t pass our bar.
Calumet (CLMT)
Market Cap: $5.19 billion
With roots dating back to 1919 and facilities strategically positioned from Louisiana to Montana, Calumet (NASDAQ: CLMT) refines crude oil into specialty products like lubricating oils, solvents, and waxes used in cosmetics, batteries, and industrial applications.
Why Are We Out on CLMT?
- Gross margin of 7.2% is below its competitors, leaving less money to invest in exploration and production
- Cash-burning history makes us doubt the long-term viability of its business model
- 5× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Calumet’s stock price of $58.77 implies a valuation ratio of 25x forward P/E. Dive into our free research report to see why there are better opportunities than CLMT.
One Small-Cap Stock to Buy:
StoneX (SNEX)
Market Cap: $8.08 billion
Originally known as INTL FCStone until its 2020 rebranding, StoneX Group (NASDAQ: SNEX) provides a global financial services network connecting companies, traders, and investors to markets through clearing, execution, and advisory services.
Why Will SNEX Beat the Market?
- Market share has increased this cycle as its 36% annual revenue growth over the last two years was exceptional
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 40% outpaced its revenue gains
- Annual tangible book value per share growth of 17.1% over the last five years was superb and indicates its capital strength increased during this cycle
StoneX is trading at $67.69 per share, or 2.7x forward P/B. Is now a good time to buy? Find out in 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
