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. 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:
Shutterstock (SSTK)
Market Cap: $621.4 million
Originally featuring a library that included many of founder Jon Oringer’s photos, Shutterstock (NYSE: SSTK) is now a digital platform where customers can license and use hundreds of millions of pieces of content.
Why Do We Steer Clear of SSTK?
- Focus on expanding its platform came at the expense of monetization as its average revenue per request fell by 73.7% annually
- Projected sales decline of 10% for the next 12 months points to a tough demand environment ahead
- Flat earnings per share over the last three years lagged its peers
Shutterstock is trading at $17.50 per share, or 2.9x forward EV/EBITDA. If you’re considering SSTK for your portfolio, see our FREE research report to learn more.
Zions Bancorporation (ZION)
Market Cap: $8.61 billion
Founded in 1873 during Utah's pioneer era and named after Mount Zion in the Bible, Zions Bancorporation (NASDAQ: ZION) operates seven regional banks across the Western United States, providing commercial, retail, and wealth management services to over a million customers.
Why Is ZION Not Exciting?
- Annual net interest income growth of 3.5% over the last five years was below our standards for the banking sector
- Inferior net interest margin of 3.1% means it must compensate for lower profitability through increased loan originations
- Muted 1.2% annual tangible book value per share growth over the last five years shows its capital generation lagged behind its banking peers
At $58.24 per share, Zions Bancorporation trades at 1.1x forward P/B. To fully understand why you should be careful with ZION, check out our full research report (it’s free).
One Small-Cap Stock to Buy:
Stride (LRN)
Market Cap: $3.64 billion
Formerly known as K12, Stride (NYSE: LRN) is an education technology company providing education solutions through digital platforms.
Why Are We Backing LRN?
- Annual revenue growth of 14.6% over the last five years was superb and indicates its market share increased during this cycle
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 45% annually
- Returns on capital are growing as management capitalizes on its market opportunities
Stride’s stock price of $86.94 implies a valuation ratio of 10.1x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
