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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here is one small-cap stock that could be the next 100 bagger and two best left ignored.
Two small-cap stocks to sell:
Upwork (UPWK)
Market cap: $1.30 billion
Formed through the 2013 merger of Elance and oDesk, Upwork (NASDAQ: UPWK) is an online platform where businesses and independent professionals connect to get work done.
Why Does UPWK Worry Us?
- Lackluster 5% annual revenue growth over the last three years indicates the company is losing ground to competitors
- Sales are projected to tank by 8.7% over the next 12 months as demand evaporates
Upwork’s stock price of $10.27 implies a valuation ratio of 4.6x forward EV/EBITDA. If you’re considering UPWK for your portfolio, see our FREE research report to learn more.
Coastal Financial (CCB)
Market cap: $679.6 million
Pioneering the intersection of traditional banking and financial technology in the Pacific Northwest, Coastal Financial (NASDAQ: CCB) operates as a bank holding company that provides traditional banking services and Banking-as-a-Service (BaaS) solutions to consumers and businesses.
Why Does CCB Give Us Pause?
- 9.5% annual revenue growth over the last two years was slower than its banking peers
- 18.1 basis point (100 basis points = 1 percentage point) decline in its net interest margin over the last two years reflects the firm’s willingness to accept lower profitability to defend its market position
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 16.5% annually while its revenue grew
At $46.25 per share, Coastal Financial trades at 1.3x forward P/B. Check out our free in-depth research report to learn more about why CCB doesn’t pass our bar.
One small-cap stock to buy:
Limbach (LMB)
Market cap: $681.6 million
Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.
Why Do We Love LMB?
- Market share has increased this cycle as its 18.7% annual revenue growth over the last two years was exceptional
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 22.6% annually, topping its revenue gains
- Industry-leading 20.8% return on capital demonstrates management’s skill in finding high-return investments
Limbach is trading at $58.09 per share, or 11.6x forward P/E. Is now a good 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 is 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% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
