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.
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 is one small-cap stock that could be the next 100 bagger and two best left ignored.
Two Small-Cap Stocks to Sell:
Elastic (ESTC)
Market Cap: $6.26 billion
Built on the powerful open-source Elasticsearch technology that powers search functionality for thousands of websites worldwide, Elastic (NYSE: ESTC) provides a search and AI platform that helps organizations find insights from their data, monitor applications, and protect against security threats.
Why Does ESTC Worry Us?
- Estimated sales growth of 14.6% for the next 12 months implies demand will slow from its two-year trend
- Efficient onboarding process gets customers to spend money faster and frees the company to focus on product enhancements
- Operating margin improvement of 1.8 percentage points over the last year demonstrates its ability to scale efficiently
Elastic is trading at $62.02 per share, or 3.2x forward price-to-sales. If you’re considering ESTC for your portfolio, see our FREE research report to learn more.
BellRing Brands (BRBR)
Market Cap: $1.04 billion
Spun out of Post Holdings in 2019, Bellring Brands (NYSE: BRBR) offers protein shakes, nutrition bars, and other products under the PowerBar, Premier Protein, and Dymatize brands.
Why Are We Cautious About BRBR?
- Subscale operations are evident in its revenue base of $2.33 billion, meaning it has fewer distribution channels than its larger rivals
- Estimated sales growth of 1.4% for the next 12 months implies demand will slow from its three-year trend
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 7.3 percentage points
At $12.19 per share, BellRing Brands trades at 10.3x forward P/E. Read our free research report to see why you should think twice about including BRBR in your portfolio.
One Small-Cap Stock to Watch:
Plexus (PLXS)
Market Cap: $7.70 billion
With over 20,000 team members across 26 global facilities, Plexus (NASDAQ: PLXS) designs, manufactures, and services complex electronic products for companies in aerospace/defense, healthcare, and industrial sectors.
Why Does PLXS Catch Our Eye?
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 17.7%
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 28.9% exceeded its revenue gains over the last two years
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Plexus’s stock price of $272.08 implies a valuation ratio of 29.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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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.
