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.
The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here are two small-cap stocks that could be the next big thing and one best left ignored.
One Small-Cap Stock to Sell:
Ryder (R)
Market Cap: $7.70 billion
As one of the first companies to introduce the idea of leasing trucks, Ryder (NYSE: R) provides rental vehicles to businesses and delivers packages directly to homes or businesses.
Why Should You Sell R?
- Sizable revenue base leads to growth challenges as its 3.5% annual revenue increases over the last two years fell short of other industrials companies
- Earnings per share have dipped by 4% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 5.8 percentage points
Ryder is trading at $190.74 per share, or 13.6x forward P/E. Dive into our free research report to see why there are better opportunities than R.
Two Small-Cap Stocks to Watch:
agilon health (AGL)
Market Cap: $422.9 million
Transforming how doctors care for seniors by shifting financial incentives from volume to outcomes, agilon health (NYSE: AGL) provides a platform that helps primary care physicians transition to value-based care models for Medicare patients through long-term partnerships and global capitation arrangements.
Why Are We Fans of AGL?
- Impressive 37.2% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Business is winning new contracts that can potentially increase in value as its customer base averaged 19.9% growth over the past two years
- Cash burn has decreased over the last five years, showing the company is becoming a more self-sustaining business
agilon health’s stock price of $1.00 implies a valuation ratio of 0.1x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
LendingClub (LC)
Market Cap: $2.39 billion
Pioneering peer-to-peer lending in the US before evolving into a digital bank, LendingClub (NYSE: LC) operates a marketplace that connects borrowers with lenders, offering personal loans, auto refinancing, and banking services.
Why Do We Love LC?
- Annual revenue growth of 24.7% over the last five years was superb and indicates its market share increased during this cycle
- Earnings per share grew by 38.3% annually over the last two years and trumped its peers
At $20.70 per share, LendingClub trades at 13.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
Check out the high-quality names we’ve flagged in our Top 6 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
