2 Small-Cap Stocks with Exciting Potential and 1 We Question
Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.
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 100 baggers and one that could be down big.
One Small-Cap Stock to Sell:
Vital Farms (VITL)
Market Cap: $436.6 million
With an emphasis on ethically produced products, Vital Farms (NASDAQ:VITL) specializes in pasture-raised eggs and butter.
Why Do We Think Twice About VITL?
- Smaller revenue base of $784.4 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Sales are projected to remain flat over the next 12 months as demand decelerates from its three-year trend
- Free cash flow margin shrank by 14 percentage points over the last year, suggesting the company is consuming more capital to stay competitive
At $10.23 per share, Vital Farms trades at 0.6x forward price-to-sales. Check out our free in-depth research report to learn more about why VITL doesn’t pass our bar.
Two Small-Cap Stocks to Watch:
Abercrombie and Fitch (ANF)
Market Cap: $3.64 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 Are We Bullish on ANF?
- Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 7.3% over the past two years
- Its collection of products is difficult to replicate at scale and leads to a best-in-class gross margin of 62.4%
- Share repurchases over the last three years enabled its annual earnings per share growth of 147% to outpace its revenue gains
Abercrombie and Fitch is trading at $81.36 per share, or 6.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Core Natural Resources (CNR)
Market Cap: $4.55 billion
Tracing its origins to 1864 and operating some mines southwest of Pittsburgh, Core Natural Resources (NYSE:CNR) mines and exports metallurgical coal used in steelmaking and thermal coal for power generation.
Why Could CNR Be a Winner?
- Impressive 14.2% annual revenue growth over the last nine years indicates it’s winning market share this cycle
- Economies of scale give it some operating leverage when demand rises
- CNR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Core Natural Resources’s stock price of $90 implies a valuation ratio of 5x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even 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.
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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 Kadant (+351% five-year return). Find your next big winner with StockStory today.
