2 Small-Cap Stocks with Solid Fundamentals and 1 We Find Risky

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.

Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are two small-cap stocks that could be the next big thing and one that could be down big.

One Small-Cap Stock to Sell:

Plexus (PLXS)

Market Cap: $3.76 billion

With over 20,000 team members across 26 global facilities, Plexus (NASDAQ:PLXS) designs, manufactures, and services complex electronic products for companies in aerospace/defense, healthcare, and industrial sectors.

Why Do We Think Twice About PLXS?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 3.6% annually over the last two years
2. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 5.2% annually
3. Poor free cash flow margin of 2.9% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends

Plexus’s stock price of $138.86 implies a valuation ratio of 19.1x forward P/E. If you’re considering PLXS for your portfolio, see our FREE research report to learn more.

Two Small-Cap Stocks to Watch:

Tecnoglass (TGLS)

Market Cap: $3.54 billion

The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE:TGLS) is a manufacturer of architectural glass, windows, and aluminum products.

Why Does TGLS Stand Out?

1. Market share has increased this cycle as its 17.5% annual revenue growth over the last five years was exceptional
2. Disciplined cost controls and effective management resulted in a strong long-term operating margin of 27.3%, and its operating leverage amplified its profits over the last five years
3. Earnings per share have massively outperformed its peers over the last five years, increasing by 47.3% annually

Tecnoglass is trading at $75.31 per share, or 18.1x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

German American Bancorp (GABC)

Market Cap: $1.53 billion

Founded in 1910 during a wave of community banking expansion in the Midwest, German American Bancorp (NASDAQ:GABC) is a financial holding company that provides banking, wealth management, and insurance services across southern Indiana and Kentucky.

Why Are We Fans of GABC?

1. Projected net interest income growth of 37.6% for the next 12 months is above its four-year trend, pointing to accelerating demand
2. Projected tangible book value per share growth of 14.6% for the next 12 months indicates capital generation will rise above its two-year trend
3. Industry-leading 12.7% return on equity demonstrates management’s skill in finding high-return investments

At $39.75 per share, German American Bancorp trades at 1.4x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

When Trump unveiled his aggressive tariff plan in April 2024, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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