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. That said, here is one small-cap stock that could amplify your portfolio’s returns and two that could be down big.
Two Small-Cap Stocks to Sell:
Tilray (TLRY)
Market Cap: $359.8 million
Founded in 2013, Tilray Brands (NASDAQ:TLRY) engages in cannabis research, cultivation, and distribution, offering a range of medical and recreational cannabis products, hemp-based foods, and alcoholic beverages.
Why Is TLRY Risky?
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 70.1 percentage points
- Incremental sales over the last three years were much less profitable as its earnings per share fell by 60.5% annually while its revenue grew
- Increased cash burn over the last year raises questions about the return timeline for its investments
Tilray is trading at $0.37 per share, or 4.7x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why TLRY doesn’t pass our bar.
Seacoast Banking (SBCF)
Market Cap: $2.12 billion
Founded during the Florida land boom of 1926 and surviving the Great Depression, Seacoast Banking Corporation of Florida (NASDAQ:SBCF) is a financial holding company that provides commercial and retail banking, wealth management, and mortgage services throughout Florida.
Why Do We Think Twice About SBCF?
- Annual revenue growth of 3.6% over the last two years was below our standards for the bank sector
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 12% annually
- High debt servicing costs relative to its earnings leave little margin for error in meeting its financial obligations
At $25 per share, Seacoast Banking trades at 0.9x forward P/B. Dive into our free research report to see why there are better opportunities than SBCF.
One Small-Cap Stock to Watch:
Integral Ad Science (IAS)
Market Cap: $1.31 billion
Founded in 2009, Integral Ad Science (NASDAQ:IAS) provides digital advertising verification and optimization solutions, ensuring that ads are viewable by real people in brand-safe environments across various platforms and devices.
Why Do We Like IAS?
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
- Operating margin expanded by 11.3 percentage points over the last year as it scaled and became more efficient
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Integral Ad Science’s stock price of $8.30 implies a valuation ratio of 2.2x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
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 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today