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 are two small-cap stocks that could be the next big thing and one that may have trouble.
One Small-Cap Stock to Sell:
Marqeta (MQ)
Market Cap: $2.17 billion
Powering the cards behind innovative fintech services like Block's Cash App, Marqeta (NASDAQ: MQ) provides a cloud-based platform that allows businesses to create customized payment card programs and process card transactions.
Why Does MQ Give Us Pause?
- Annual sales declines of 12.1% for the past two years show its products and services struggled to connect with the market
- Steep infrastructure costs and weaker unit economics for a software company are reflected in its low gross margin of 70.6%
- Operating margin declined by 4 percentage points over the last year as its sales cratered
At $4.95 per share, Marqeta trades at 3.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than MQ.
Two Small-Cap Stocks to Buy:
monday.com (MNDY)
Market Cap: $8.22 billion
With its colorful interface of boards, columns, and automation that replaced the chaos of spreadsheets, monday.com (NASDAQ: MNDY) is a cloud-based work operating system that helps teams manage projects, track tasks, and streamline workflows through customizable interfaces.
Why Are We Backing MNDY?
- ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
- Superior software functionality and low servicing costs lead to a best-in-class gross margin of 89.2%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
monday.com’s stock price of $159.34 implies a valuation ratio of 6.1x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Doximity (DOCS)
Market Cap: $8.48 billion
With over 80% of U.S. physicians as members of its digital community, Doximity (NYSE: DOCS) operates a digital platform that enables physicians and other healthcare professionals to collaborate, stay current with medical news, manage their careers, and conduct virtual patient visits.
Why Should You Buy DOCS?
- Billings growth has averaged 20.1% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
- Strong free cash flow margin of 50.2% enables it to reinvest or return capital consistently
Doximity is trading at $45.04 per share, or 13.4x forward price-to-sales. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 244% over the last five years (as of June 30, 2025).
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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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