3 Small-Cap Stocks That Fall Short

Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.

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 are three small-cap stocks to swipe left on and some alternatives you should look into instead.

Getty Images (GETY)

Market Cap: $742.5 million

With a vast library of over 562 million visual assets documenting everything from breaking news to iconic historical moments, Getty Images (NYSE:GETY) is a global visual content marketplace that licenses photos, videos, illustrations, and music to businesses, media outlets, and creative professionals.

Why Is GETY Risky?

1. 1.3% annual revenue growth over the last two years was slower than its business services peers
2. Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 3.9 percentage points
3. 12.1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

At $1.81 per share, Getty Images trades at 2.5x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why GETY doesn’t pass our bar.

Cable One (CABO)

Market Cap: $855.3 million

Founded in 1986, Cable One (NYSE:CABO) provides high-speed internet, cable television, and telephone services, primarily in smaller markets across the United States.

Why Are We Out on CABO?

1. Performance surrounding its residential data subscribers has lagged its peers
2. Sales are projected to tank by 3% over the next 12 months as its demand continues evaporating
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

Cable One is trading at $151.95 per share, or 4.3x forward P/E. Read our free research report to see why you should think twice about including CABO in your portfolio.

Schneider (SNDR)

Market Cap: $4.33 billion

Employing thousands of drivers across the country to make deliveries, Schneider (NYSE:SNDR) makes full truckload and intermodal deliveries regionally and across borders.

Why Do We Steer Clear of SNDR?

1. Sales tumbled by 4.6% annually over the last two years, showing market trends are working against its favor during this cycle
2. Earnings per share have dipped by 8.8% annually over the past five years, which is concerning because stock prices follow EPS over the long term
3. Waning returns on capital imply its previous profit engines are losing steam

Schneider’s stock price of $24.72 implies a valuation ratio of 22.7x forward P/E. Dive into our free research report to see why there are better opportunities than SNDR.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

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