The Russell 2000 (^RUT) is home to many small-cap stocks, offering investors the chance to uncover hidden gems before the broader market catches on. However, these companies often come with higher volatility and risk, as their smaller size makes them more vulnerable to economic downturns.
Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. That said, here are two Russell 2000 stocks that could be the next big thing and one that may struggle to keep up.
One Stock to Sell:
ICU Medical (ICUI)
Market Cap: $4.55 billion
Founded in 1984 and named for its initial focus on intensive care units, ICU Medical (NASDAQ: ICUI) develops and manufactures medical products for infusion therapy, vascular access, and vital care applications used in hospitals and other healthcare settings.
Why Is ICUI Not Exciting?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 2.5% annually over the last two years
- Annual earnings per share growth of 2.9% underperformed its revenue over the last five years, partly because it diluted shareholders
- Low returns on capital reflect management’s struggle to allocate funds effectively
ICU Medical’s stock price of $182.05 implies a valuation ratio of 20.5x forward P/E. Dive into our free research report to see why there are better opportunities than ICUI.
Two Stocks to Buy:
Construction Partners (ROAD)
Market Cap: $6.86 billion
Founded in 2001, Construction Partners (NASDAQ: ROAD) is a civil infrastructure company that builds and maintains roads, highways, and other infrastructure projects.
Why Should You Buy ROAD?
- Annual revenue growth of 40.5% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 43.7% annually, topping its revenue gains
- Free cash flow margin grew by 8.8 percentage points over the last five years, giving the company more chips to play with
At $121.01 per share, Construction Partners trades at 32.5x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
CLEAR Secure (YOU)
Market Cap: $4.97 billion
Recognized by its signature blue lanes and biometric pods at airport checkpoints across America, CLEAR Secure (NYSE: YOU) provides biometric identity verification technology that allows subscribers to bypass regular security lines at airports and access secure experiences at various venues.
Why Do We Love YOU?
- Annual revenue growth of 36% over the past five years was outstanding, reflecting market share gains
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- YOU is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
CLEAR Secure is trading at $49.00 per share, or 4.4x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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 Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
