Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings. However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
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 be the next 100 bagger and two that could be down big.
Two Small-Cap Stocks to Sell:
Zebra (ZBRA)
Market Cap: $10.45 billion
Taking its name from the black and white stripes of barcodes, Zebra Technologies (NASDAQ: ZBRA) provides barcode scanners, mobile computers, RFID systems, and other data capture technologies that help businesses track assets and optimize operations.
Why Is ZBRA Not Exciting?
- Muted 3.9% annual revenue growth over the last five years shows its demand lagged behind its business services peers
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 4.3% annually
- Eroding returns on capital suggest its historical profit centers are aging
Zebra’s stock price of $219.26 implies a valuation ratio of 11.8x forward P/E. Read our free research report to see why you should think twice about including ZBRA in your portfolio.
Excelerate Energy (EE)
Market Cap: $1.07 billion
Operating specialized vessels that can deliver up to 1.2 billion cubic feet of natural gas per day, Excelerate Energy (NYSE: EE) provides liquified natural gas regasification services using floating vessels that convert LNG back into natural gas.
Why Are We Cautious About EE?
- Smaller revenue base of $1.23 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Gross margin of 30.1% is below its competitors, leaving less money to invest in exploration and production
Excelerate Energy is trading at $33.35 per share, or 14.3x forward P/E. Dive into our free research report to see why there are better opportunities than EE.
One Small-Cap Stock to Buy:
LendingClub (LC)
Market Cap: $1.67 billion
Pioneering peer-to-peer lending in the US before evolving into a digital bank, LendingClub (NYSE: LC) operates a marketplace that connects borrowers with lenders, offering personal loans, auto refinancing, and banking services.
Why Are We Bullish on LC?
- Annual revenue growth of 25.7% over the past five years was outstanding, reflecting market share gains this cycle
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 79.1% outpaced its revenue gains
At $15.13 per share, LendingClub trades at 8.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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 meeting 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
