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.
The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here are two small-cap stocks that could be the next 100 baggers and one that may have trouble.
One Small-Cap Stock to Sell:
Vishay Intertechnology (VSH)
Market Cap: $2.78 billion
Named after the founder's ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE: VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices.
Why Do We Think VSH Will Underperform?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 5% annually over the last two years
- High input costs result in an inferior gross margin of 20.3% that must be offset through higher volumes
- Cash burn has widened over the last five years, making us question whether it can reliably generate shareholder value
Vishay Intertechnology is trading at $20.55 per share, or 32.4x forward P/E. Dive into our free research report to see why there are better opportunities than VSH.
Two Small-Cap Stocks to Watch:
SentinelOne (S)
Market Cap: $4.59 billion
Built on the principle of "fighting machine with machine," SentinelOne (NYSE: S) provides an AI-powered cybersecurity platform that autonomously prevents, detects, and responds to threats across endpoints, cloud workloads, and identity systems.
Why Are We Fans of S?
- ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
- Projected revenue growth of 20% for the next 12 months suggests its momentum from the last two years will persist
- Gross margin of 74.1% provides the financial cushion needed to invest in marketing and develop new products
At $13.44 per share, SentinelOne trades at 3.7x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
Halozyme Therapeutics (HALO)
Market Cap: $7.75 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 Could HALO Be a Winner?
- Annual revenue growth of 39.2% over the past five years was outstanding, reflecting market share gains this cycle
- Market share will likely rise over the next 12 months as its expected revenue growth of 25.8% is robust
- Earnings per share have massively outperformed its peers over the last five years, increasing by 35.6% annually
Halozyme Therapeutics’s stock price of $65.64 implies a valuation ratio of 7.9x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
