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.
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 are two small-cap stocks that could be the next 100 baggers and one that may have trouble.
One Small-Cap Stock to Sell:
Payoneer (PAYO)
Market Cap: $2.41 billion
Founded during the early days of global e-commerce in 2005 to solve international payment challenges, Payoneer (NASDAQ: PAYO) provides financial technology services that enable small and medium-sized businesses to send and receive payments globally across borders.
Why Do We Think Twice About PAYO?
- Annual earnings per share growth of 4.8% underperformed its revenue over the last two years, showing its incremental sales were less profitable
- ROE of 7.3% reflects management’s challenges in identifying attractive investment opportunities
Payoneer is trading at $7.14 per share, or 25.2x forward P/E. Read our free research report to see why you should think twice about including PAYO in your portfolio.
Two Small-Cap Stocks to Watch:
Lyft (LYFT)
Market Cap: $5.86 billion
Founded by Logan Green and John Zimmer as a long-distance intercity carpooling company Zimride, Lyft (NASDAQ: LYFT) operates a ridesharing network in the US and Canada.
Why Do We Love LYFT?
- Active Riders 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 significantly boosted profitability as its annual earnings per share growth of 69.1% over the last three years outstripped its revenue performance
- Free cash flow margin jumped by 24.1 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Lyft’s stock price of $15.43 implies a valuation ratio of 7.7x forward EV/EBITDA. Is now the right time to buy? See for yourself in our full research report, it’s free.
ANI Pharmaceuticals (ANIP)
Market Cap: $1.65 billion
With a diverse portfolio of 116 pharmaceutical products and a growing rare disease platform, ANI Pharmaceuticals (NASDAQ: ANIP) develops, manufactures, and markets branded and generic prescription pharmaceuticals, with a focus on rare disease treatments.
Why Are We Fans of ANIP?
- Annual revenue growth of 33.6% over the past two years was outstanding, reflecting market share gains this cycle
- Free cash flow margin grew by 38.4 percentage points over the last five years, giving the company more chips to play with
- Historical investments are beginning to pay off as its returns on capital are growing
At $77.82 per share, ANI Pharmaceuticals trades at 8.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is 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% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
