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.
These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. That said, here is one small-cap stock that could be the next 100 bagger and two that could be down big.
Two Small-Cap Stocks to Sell:
Accel Entertainment (ACEL)
Market Cap: $996.2 million
Established in Illinois, Accel Entertainment (NYSE: ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.
Why Does ACEL Worry Us?
- Sluggish trends in its video gaming terminals sold suggest customers aren’t adopting its solutions as quickly as the company hoped
- Estimated sales growth of 6.5% for the next 12 months implies demand will slow from its two-year trend
- Poor free cash flow margin of 4.4% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $11.90 per share, Accel Entertainment trades at 12.8x forward P/E. Dive into our free research report to see why there are better opportunities than ACEL.
EPAM (EPAM)
Market Cap: $10.02 billion
Founded in 1993 during the early days of offshore software development, EPAM Systems (NYSE: EPAM) provides digital engineering, cloud, and AI transformation services to help global enterprises and startups modernize their technology systems and create digital products.
Why Do We Think Twice About EPAM?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7.3 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
EPAM is trading at $176.82 per share, or 16.3x forward P/E. To fully understand why you should be careful with EPAM, check out our full research report (it’s free).
One Small-Cap Stock to Buy:
BellRing Brands (BRBR)
Market Cap: $7.36 billion
Spun out of Post Holdings in 2019, Bellring Brands (NYSE: BRBR) offers protein shakes, nutrition bars, and other products under the PowerBar, Premier Protein, and Dymatize brands.
Why Do We Love BRBR?
- Products are flying off the shelves as its unit sales averaged 20.8% growth over the past two years
- Earnings per share grew by 28% annually over the last three years and trumped its peers
- ROIC punches in at 48.9%, illustrating management’s expertise in identifying profitable investments
BellRing Brands’s stock price of $57.41 implies a valuation ratio of 24.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
