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.

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 best left ignored.

Two small-cap stocks to sell:

Asana (ASAN)

Market Cap: $2.75 billion

Born from the founders' frustration with the inefficiencies of email-based collaboration at Facebook, Asana (NYSE: ASAN) provides a work management platform that helps organizations track projects, set goals, and manage workflows in a centralized digital workspace.

Why Should You Sell ASAN?

1. Average ARR growth of 9.5% over the last year has disappointed, suggesting it’s had a hard time winning long-term deals and renewals
2. Customers have churned over the last year due to the commoditized nature of its software, as reflected in its 96.5% net revenue retention rate
3. Prolonged sales cycles signal certain parts of its software must be customized for its large enterprise clients, impeding customer growth

Asana’s stock price of $11.83 implies a valuation ratio of 3x forward price-to-sales. Read our free research report to see why you should think twice about including ASAN in your portfolio.

Piper Sandler (PIPR)

Market Cap: $4.34 billion

Tracing its roots back to 1895 and rebranded from Piper Jaffray in 2020, Piper Sandler (NYSE: PIPR) is an investment bank that provides advisory services, capital raising, institutional brokerage, and research for corporations, governments, and institutional investors.

Why Does PIPR Worry Us?

1. Annual revenue growth of 5% over the last five years was below our standards for the financials sector
2. Performance over the past five years shows its incremental sales were less profitable, as its 3.3% annual earnings per share growth trailed its revenue gains
3. Muted 6.4% annual tangible book value per share growth over the last five years shows its capital generation lagged behind its financials peers

At $64.58 per share, Piper Sandler trades at 13.3x forward P/E. Check out our free in-depth research report to learn more about why PIPR doesn’t pass our bar.

One small-cap stock to buy:

Abercrombie and Fitch (ANF)

Market Cap: $6.61 billion

Founded as an outdoor and sporting brand, Abercrombie & Fitch (NYSE: ANF) evolved to become a specialty retailer that sells its own brand of fashionable clothing to young adults.

Why Is ANF a Good Business?

1. Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 5% over the past two years
2. Its collection of products is difficult to replicate at scale and leads to a best-in-class gross margin of 63.2%
3. Share buybacks catapulted its annual earnings per share growth to 76.3%, which outperformed its revenue gains over the last three years

Abercrombie and Fitch is trading at $158.70 per share, or 12.9x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

High-quality stocks for all market conditions

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

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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.