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 be the next 100 bagger and two best left ignored.
Two Small-Cap Stocks to Sell:
Shutterstock (SSTK)
Market Cap: $667.4 million
Originally featuring a library that included many of founder Jon Oringer’s photos, Shutterstock (NYSE: SSTK) is now a digital platform where customers can license and use hundreds of millions of pieces of content.
Why Does SSTK Give Us Pause?
- Decision to emphasize platform growth over monetization has contributed to 18.6% annual declines in its average revenue per request
- Forecasted revenue decline of 1% for the upcoming 12 months implies demand will fall off a cliff
- Performance over the past three years was negatively impacted by new share issuances as its earnings per share grew slower than its revenue
Shutterstock’s stock price of $18.82 implies a valuation ratio of 3.1x forward EV/EBITDA. Read our free research report to see why you should think twice about including SSTK in your portfolio.
Tilly's (TLYS)
Market Cap: $54.85 million
With an emphasis on skate and surf culture, Tilly’s (NYSE: TLYS) is a specialty retailer that sells clothing, footwear, and accessories geared towards fashion-forward teens and young adults.
Why Do We Avoid TLYS?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Negative earnings profile makes it challenging to secure favorable financing terms from lenders
Tilly's is trading at $1.81 per share, or 0.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than TLYS.
One Small-Cap Stock to Buy:
Remitly (RELY)
Market Cap: $2.85 billion
With Amazon founder Jeff Bezos as an early investor, Remitly (NASDAQ: RELY) is an online platform that enables consumers to safely and quickly send money globally.
Why Should You Buy RELY?
- Active Customers have grown by 31.9% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 74.6% over the last three years outstripped its revenue performance
- Free cash flow margin jumped by 24.7 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $13.72 per share, Remitly trades at 9x forward EV/EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
