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3 Small-Cap Stocks with Solid Fundamentals

AWI Cover Image

In today’s market, large companies dominate the landscape and grow their leads by acquiring smaller competitors - a trend that will accelerate with the Trump administration. However, some lesser-known players will continue thriving because they’ve carved durable niches for themselves.

Digging up these buried treasures isn’t easy, and that’s exactly why we created StockStory. That said, here are three hidden gems that could be the next 100 baggers.

Armstrong World (AWI)

Market Cap: $8.55 billion

Started as a two-man shop dating back to the 1860s, Armstrong (NYSE: AWI) provides ceiling and wall products to commercial and residential spaces.

Why Is AWI a Good Business?

  1. Annual revenue growth of 11.5% over the last two years was superb and indicates its market share increased during this cycle
  2. Disciplined cost controls and effective management resulted in a strong long-term operating margin of 24.7%, and its operating leverage amplified its profits over the last five years
  3. Share buybacks catapulted its annual earnings per share growth to 18.7%, which outperformed its revenue gains over the last two years

At $198.27 per share, Armstrong World trades at 23.6x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

WEBTOON (WBTN)

Market Cap: $1.49 billion

Pioneering a vertical-scrolling format optimized for mobile devices, WEBTOON Entertainment (NASDAQ: WBTN) operates a global platform where creators publish serialized web-comics and web-novels that users can read in bite-sized episodes.

Why Are We Backing WBTN?

  1. Solid 7.2% annual revenue growth over the last two years indicates its offering’s solve complex business issues
  2. Adjusted operating margin increased by 10.9 percentage points over the last four years as it refined its cost structure
  3. Incremental sales significantly boosted profitability as its annual earnings per share growth of 75.9% over the last two years outstripped its revenue performance

WEBTOON is trading at $11.13 per share, or 49.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Halozyme Therapeutics (HALO)

Market Cap: $9.55 billion

Known for transforming hours-long intravenous infusions into minutes-long subcutaneous injections, Halozyme Therapeutics (NASDAQ: HALO) develops and licenses its proprietary ENHANZE technology that enables subcutaneous delivery of injectable drugs that would otherwise require intravenous administration.

Why Are We Positive On HALO?

  1. Market share has increased this cycle as its 44.2% annual revenue growth over the last five years was exceptional
  2. Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
  3. HALO is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

Halozyme Therapeutics’s stock price of $81.25 implies a valuation ratio of 9.7x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

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.

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