1 Small-Cap Stock with Promising Prospects and 2 We Brush Off

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.

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. Keeping that in mind, here is one small-cap stock that could be the next 100 bagger and two best left ignored.

Two Small-Cap Stocks to Sell:

nCino (NCNO)

Market Cap: $3.72 billion

Born from the internal technology needs of a community bank in 2011, nCino (NASDAQ:NCNO) provides cloud-based software that helps financial institutions streamline client onboarding, loan origination, and account opening processes.

Why Does NCNO Worry Us?

1. 19.1% annual revenue growth over the last three years was slower than its software peers
2. Estimated sales growth of 5.7% for the next 12 months implies demand will slow from its three-year trend
3. Steep infrastructure costs and weaker unit economics for a software company are reflected in its low gross margin of 60.2%

At $32.07 per share, nCino trades at 6.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than NCNO.

ASGN (ASGN)

Market Cap: $2.33 billion

Evolving from its roots in IT staffing to become a high-end technology consulting powerhouse, ASGN (NYSE:ASGN) provides specialized IT consulting services and staffing solutions to Fortune 1000 companies and U.S. federal government agencies.

Why Are We Out on ASGN?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 6.8% annually over the last two years
2. Estimated sales for the next 12 months are flat and imply a softer demand environment
3. Incremental sales over the last five years were much less profitable as its earnings per share fell by 1.8% annually while its revenue grew

ASGN is trading at $53.25 per share, or 11.4x forward P/E. To fully understand why you should be careful with ASGN, check out our full research report (it’s free).

One Small-Cap Stock to Watch:

Lyft (LYFT)

Market Cap: $6.56 billion

Founded by Logan Green and John Zimmer as a long-distance intercity carpooling company Zimride, Lyft (NASDAQ: LYFT) operates a ridesharing network in the US and Canada.

Why Are We Positive On LYFT?

1. Active Riders are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
2. Incremental sales over the last three years have been highly profitable as its earnings per share increased by 39.2% annually, topping its revenue gains
3. Free cash flow margin jumped by 23.7 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

Lyft’s stock price of $16.15 implies a valuation ratio of 12x forward EV/EBITDA. Is now a good time to buy? 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 2025, 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 Strong Momentum Stocks for this week. 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-micro-cap company Tecnoglass (+1,754% 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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