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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Columbus McKinnon (CMCO)
Market Cap: $505 million
With 19 different brands across the globe, Columbus McKinnon (NASDAQ: CMCO) offers material handling equipment for the construction, manufacturing, and transportation industries.
Why Is CMCO Risky?
- Muted 2.4% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 3% annually while its revenue grew
- Free cash flow margin shrank by 12.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
At $17.83 per share, Columbus McKinnon trades at 5.5x forward P/E. Check out our free in-depth research report to learn more about why CMCO doesn’t pass our bar.
Pursuit (PRSU)
Market Cap: $804.7 million
With attractions ranging from glacier tours in the Canadian Rockies to an oceanfront geothermal lagoon in Iceland, Pursuit Attractions and Hospitality (NYSE: PRSU) operates iconic travel experiences, experiential marketing services, and exhibition management across North America and Europe.
Why Are We Wary of PRSU?
- Annual sales declines of 37% for the past five years show its products and services struggled to connect with the market
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Negative returns on capital show that some of its growth strategies have backfired
Pursuit’s stock price of $28.48 implies a valuation ratio of 7.9x forward EV-to-EBITDA. To fully understand why you should be careful with PRSU, check out our full research report (it’s free).
Markforged (MKFG)
Market Cap: $98.34 million
Beginning as a start-up at SolidWorks World–an annual design and engineering conference, Markforged (NYSE: MKFG) offers 3D printers and softwares to manufacturers of various industries.
Why Is MKFG Not Exciting?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 8.2% annually over the last two years
- Free cash flow margin dropped by 63.8 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Markforged is trading at $4.60 per share, or 1x forward price-to-sales. If you’re considering MKFG for your portfolio, see our FREE research report to learn more.
Stocks We Like More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
