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 amplify your portfolio’s returns and two that could be down big.
Two Small-Cap Stocks to Sell:
E.W. Scripps (SSP)
Market Cap: $311.2 million
Founded as a chain of daily newspapers, E.W. Scripps (NASDAQ: SSP) is a diversified media enterprise operating a range of local television stations, national networks, and digital media platforms.
Why Do We Avoid SSP?
- Annual revenue growth of 1.6% over the last five years was below our standards for the consumer discretionary sector
- Unchanged returns on capital make it difficult for the company’s valuation multiple to re-rate
At $3.46 per share, E.W. Scripps trades at 0.1x forward price-to-sales. To fully understand why you should be careful with SSP, check out our full research report (it’s free).
ProFrac (ACDC)
Market Cap: $1.21 billion
Operating one of the largest electric-powered fracturing fleets in North America, ProFrac (NASDAQ: ACDC) provides hydraulic fracturing services that help oil and gas companies extract hydrocarbons from underground shale formations.
Why Does ACDC Fall Short?
- Gross margin of 32.5% reflects its high production costs and unfavorable asset base
- Costs have risen faster than its revenue over the last five years, causing its EBITDA margin to decline by 8.1 percentage points
- Low free cash flow margin of 3.9% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
ProFrac’s stock price of $6.69 implies a valuation ratio of 0.7x forward price-to-sales. Read our free research report to see why you should think twice about including ACDC in your portfolio.
One Small-Cap Stock to Buy:
Euronet Worldwide (EEFT)
Market Cap: $2.64 billion
Operating a global network of over 47,000 ATMs and 821,000 point-of-sale terminals across more than 60 countries, Euronet Worldwide (NASDAQ: EEFT) provides electronic payment solutions including ATM services, prepaid product processing, and international money transfer services.
Why Are We Backing EEFT?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 11.2% annual sales growth over the last five years
- Share buybacks catapulted its annual earnings per share growth to 32.3%, which outperformed its revenue gains over the last five years
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
Euronet Worldwide is trading at $69.29 per share, or 6.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
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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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
