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.
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. Keeping that in mind, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Academy Sports (ASO)
Market Cap: $2.84 billion
Founded in 1938 as a tire shop before expanding into fishing equipment, Academy Sports & Outdoor (NASDAQ: ASO) sells a broad selection of sporting goods but is still known for its outdoor activity merchandise.
Why Is ASO Not Exciting?
- 4.2% annual revenue growth over the last five years was slower than its consumer retail peers
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 1.9 percentage points
Academy Sports’s stock price of $42.50 implies a valuation ratio of 6.5x forward P/E. If you’re considering ASO for your portfolio, see our FREE research report to learn more.
Papa John's (PZZA)
Market Cap: $1.52 billion
Founded by the eclectic John “Papa John” Schnatter, Papa John’s (NASDAQ: PZZA) is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.
Why Should You Sell PZZA?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants
- Estimated sales growth of 2.9% for the next 12 months implies demand will slow from its six-year trend
- Challenging supply chain dynamics and bad unit economics are reflected in its low gross margin of 17.3%
At $45.01 per share, Papa John's trades at 22.9x forward P/E. To fully understand why you should be careful with PZZA, check out our full research report (it’s free).
Skechers (SKX)
Market Cap: $9.28 billion
Synonymous with "dad shoe", Skechers (NYSE: SKX) is a footwear company renowned for its comfortable, stylish, and affordable shoes for all ages.
Why Are We Out on SKX?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Estimated sales growth of 7.4% for the next 12 months implies demand will slow from its two-year trend
- Low free cash flow margin of 4.4% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Skechers is trading at $62 per share, or 14.5x forward P/E. Dive into our free research report to see why there are better opportunities than SKX.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. 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.
