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.
SmartRent (SMRT)
Market Cap: $292.2 million
Founded by an employee at a real estate rental company, SmartRent (NYSE: SMRT) provides smart home devices and software for multifamily residential properties, single-family rental homes, and student housing communities.
Why Are We Wary of SMRT?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 19.8% annually over the last two years
- Flat earnings per share over the last two years lagged its peers
- Negative free cash flow raises questions about the return timeline for its investments
SmartRent’s stock price of $1.53 implies a valuation ratio of 122.1x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including SMRT in your portfolio.
CONMED (CNMD)
Market Cap: $1.07 billion
With over five decades of experience in surgical innovation since its founding in 1970, CONMED (NYSE: CNMD) develops and manufactures medical devices and equipment for surgical procedures, specializing in orthopedic and general surgery products.
Why Are We Cautious About CNMD?
- Muted 5.1% annual revenue growth over the last two years shows its demand lagged behind its healthcare peers
- Modest revenue base of $1.37 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- Projected sales decline of 1.3% for the next 12 months points to a tough demand environment ahead
CONMED is trading at $34.79 per share, or 8x forward P/E. Check out our free in-depth research report to learn more about why CNMD doesn’t pass our bar.
Mobileye (MBLY)
Market Cap: $6.27 billion
With its EyeQ chips installed in over 200 million vehicles worldwide, Mobileye (NASDAQ: MBLY) develops advanced driver assistance systems and autonomous driving technologies that help vehicles detect and respond to road conditions.
Why Do We Steer Clear of MBLY?
- Sales tumbled by 4.6% annually over the last two years, showing market trends are working against its favor during this cycle
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 5.2 percentage points
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $7.46 per share, Mobileye trades at 28.7x forward P/E. Dive into our free research report to see why there are better opportunities than MBLY.
Stocks We Like More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it's flagging for this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
