Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names. But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses.
The high-risk, high-reward nature of the Russell 2000 makes stock selection critical, and we’re here to guide you toward the right ones. That said, here is one Russell 2000 stock that could be a breakout winner and two that may face some trouble.
Two Stocks to Sell:
Shutterstock (SSTK)
Market Cap: $198.4 million
Originally featuring a library that included many of founder Jon Oringer’s photos, Shutterstock (NYSE: SSTK) is now a digital platform where customers can license and use hundreds of millions of pieces of content.
Why Does SSTK Give Us Pause?
- Focus on expanding its platform came at the expense of monetization as its average revenue per request fell by 87.9% annually
- Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
- Incremental sales over the last three years were much less profitable as its earnings per share fell by 31.2% annually while its revenue grew
At $5.33 per share, Shutterstock trades at 0.3x forward price-to-gross profit. Dive into our free research report to see why there are better opportunities than SSTK.
Renasant (RNST)
Market Cap: $3.98 billion
Founded in 1904 during a time when the South was rebuilding its economy, Renasant (NYSE: RNST) is a regional bank holding company that offers banking, wealth management, insurance, and specialized lending services throughout the Southeast.
Why Does RNST Fall Short?
- Estimated net interest income growth of 3.9% for the next 12 months implies demand will slow from its five-year trend
- Performance over the past five years shows its incremental sales were less profitable, as its 4.9% annual earnings per share growth trailed its revenue gains
- Muted 3% annual tangible book value per share growth over the last two years shows its capital generation lagged behind its banking peers
Renasant’s stock price of $43.57 implies a valuation ratio of 1x forward P/B. If you’re considering RNST for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Hims & Hers Health (HIMS)
Market Cap: $6.43 billion
Originally launched with a focus on stigmatized conditions like hair loss and sexual health, Hims & Hers Health (NYSE: HIMS) operates a consumer-focused telehealth platform that connects patients with healthcare providers for prescriptions and wellness products.
Why Will HIMS Beat the Market?
- Business is winning new contracts that can potentially increase in value as its customer base averaged 26.1% growth over the past two years
- Free cash flow margin expanded by 16.1 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- Rising returns on capital show the company is starting to reap the benefits of its past investments
Hims & Hers Health is trading at $27.60 per share, or 2x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive 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 Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
