The Russell 2000 (^RUT) is home to many small-cap stocks, offering investors the chance to uncover hidden gems before the broader market catches on. However, these companies often come with higher volatility and risk, as their smaller size makes them more vulnerable to economic downturns.
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 is one Russell 2000 stock that could be a breakout winner and two that may struggle to keep up.
Two Stocks to Sell:
Box (BOX)
Market Cap: $4.67 billion
Known as the "Content Cloud" for managing the 90% of business data that exists as unstructured files and documents, Box (NYSE: BOX) provides a cloud-based platform that enables organizations to securely manage, share, and collaborate on their content from anywhere on any device.
Why Are We Hesitant About BOX?
- Offerings struggled to generate meaningful interest as its average billings growth of 10% over the last year did not impress
- Anticipated sales growth of 7.9% for the next year implies demand will be shaky
- Operating margin failed to increase over the last year, indicating the company couldn’t optimize its expenses
Box is trading at $31.85 per share, or 4x forward price-to-sales. If you’re considering BOX for your portfolio, see our FREE research report to learn more.
Domo (DOMO)
Market Cap: $574.4 million
Named for the Japanese word meaning "thank you very much," Domo (NASDAQ: DOMO) provides a cloud-based business intelligence platform that connects people with real-time data and insights across organizations.
Why Do We Avoid DOMO?
- Offerings couldn’t generate interest over the last year as its billings have averaged 1.1% declines
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
At $13.93 per share, Domo trades at 1.8x forward price-to-sales. Dive into our free research report to see why there are better opportunities than DOMO.
One Stock to Watch:
Trustmark (TRMK)
Market Cap: $2.26 billion
Tracing its roots back to 1889 in Mississippi, Trustmark (NASDAQ: TRMK) is a financial services organization providing banking, wealth management, insurance, and mortgage services across five southeastern states.
Why Do We Like TRMK?
- Share repurchases over the last two years enabled its annual earnings per share growth of 12.7% to outpace its revenue gains
- Annual tangible book value per share growth of 23.6% over the last two years was superb and indicates its capital strength increased during this cycle
- Forecasted tangible book value per share growth of 9.1% for the next 12 months indicates its capital generation over the last two years is sustainable
Trustmark’s stock price of $37.44 implies a valuation ratio of 1x forward P/B. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. 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 Tecnoglass (+1,754% 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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