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.
Picking the right small caps isn’t easy, and that’s exactly why StockStory exists - to help you focus on the best opportunities. 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:
Integra LifeSciences (IART)
Market Cap: $1.35 billion
Founded in 1989 as a pioneer in regenerative medicine technology, Integra LifeSciences (NASDAQ: IART) develops and manufactures medical technologies for neurosurgery, wound care, and surgical reconstruction, including regenerative tissue products and surgical instruments.
Why Do We Think IART Will Underperform?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 4.6% annually
- 5× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
At $17.45 per share, Integra LifeSciences trades at 6.7x forward P/E. Read our free research report to see why you should think twice about including IART in your portfolio.
Two Stocks to Watch:
Belden (BDC)
Market Cap: $5.26 billion
With its enamel-coated copper wire used in WWI for the Allied forces, Belden (NYSE: BDC) designs, manufactures, and sells electronic components to various industries.
Why Could BDC Be a Winner?
- Annual revenue growth of 11.2% over the last two years was superb and indicates its market share increased during this cycle
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 34.6%
- Share buybacks catapulted its annual earnings per share growth to 16.7%, which outperformed its revenue gains over the last two years
Belden’s stock price of $135.54 implies a valuation ratio of 14.6x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
SM Energy (SM)
Market Cap: $7.73 billion
Operating across three key regions with over 328,000 net acres under its control, SM Energy (NYSE: SM) explores for, develops, and produces oil, natural gas, and natural gas liquids primarily from shale formations in Texas and Utah.
Why Will SM Outperform?
- Impressive 16.7% annual revenue growth over the last ten years indicates it’s winning market share this cycle
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 86.8%
- EBITDA margin expanded by 10.1 percentage points over the last five years as it scaled and became more efficient
SM Energy is trading at $32.38 per share, or 4.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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.
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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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
