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.
The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. Keeping that in mind, here is one small-cap stock that could amplify your portfolio’s returns and two that may have trouble.
Two Small-Cap Stocks to Sell:
Upwork (UPWK)
Market Cap: $1.13 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 Is UPWK Not Exciting?
- Muted 6.6% annual revenue growth over the last three years shows its demand lagged behind its consumer internet peers
- Forecasted revenue decline of 8.8% for the upcoming 12 months implies demand will fall off a cliff
Upwork’s stock price of $8.94 implies a valuation ratio of 4.2x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than UPWK.
Envista (NVST)
Market Cap: $4.36 billion
Uniting more than 30 trusted brands including Nobel Biocare, Ormco, and DEXIS under one corporate umbrella, Envista Holdings (NYSE: NVST) is a global dental products company that provides equipment, consumables, and specialized technologies for dental professionals.
Why Is NVST Risky?
- Muted 3.4% annual revenue growth over the last five years shows its demand lagged behind its healthcare peers
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 7% annually
- Negative returns on capital show management lost money while trying to expand the business, and its shrinking returns suggest its past profit sources are losing steam
Envista is trading at $27.14 per share, or 17.5x forward P/E. If you’re considering NVST for your portfolio, see our FREE research report to learn more.
One Small-Cap Stock to Buy:
Remitly (RELY)
Market Cap: $5.62 billion
With Amazon founder Jeff Bezos as an early investor, Remitly (NASDAQ: RELY) is an online platform that enables consumers to safely and quickly send money globally.
Why Are We Bullish on RELY?
- Active Customers are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 163% annually, topping its revenue gains
- Free cash flow margin expanded by 43.1 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends
At $26.89 per share, Remitly trades at 11.3x forward EV/EBITDA. Is now the right time to buy? See for yourself in our comprehensive 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.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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.
