1 Small-Cap Stock to Research Further and 2 Facing Challenges

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. Keeping that in mind, here is one small-cap stock that could be the next big thing and two that may have trouble.

Two Small-Cap Stocks to Sell:

Amtech (ASYS)

Market Cap: $83.02 million

Focusing on the silicon carbide and power semiconductor sectors, Amtech Systems (NASDAQ:ASYS) produces the machinery and related chemicals needed for manufacturing semiconductors.

Why Are We Out on ASYS?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 15.8% annually over the last two years
2. Historical operating margin losses point to an inefficient cost structure
3. Negative returns on capital show management lost money while trying to expand the business, and its decreasing returns suggest its historical profit centers are aging

Amtech’s stock price of $5.79 implies a valuation ratio of 206.1x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than ASYS.

Lithia (LAD)

Market Cap: $8.51 billion

With a strong presence in the Western US, Lithia Motors (NYSE:LAD) sells a wide range of vehicles, including new and used cars, trucks, SUVs, and luxury vehicles from various manufacturers.

Why Are We Hesitant About LAD?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
2. Widely-available products (and therefore stiff competition) result in an inferior gross margin of 15.8% that must be offset through higher volumes
3. 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

Lithia is trading at $331.76 per share, or 9.5x forward P/E. Read our free research report to see why you should think twice about including LAD in your portfolio.

One Small-Cap Stock to Watch:

FB Financial (FBK)

Market Cap: $2.87 billion

Founded in 1906 and operating through more than a century of economic cycles, FB Financial (NYSE:FBK) operates FirstBank, providing commercial and consumer banking services across Tennessee, Kentucky, Alabama, and North Georgia.

Why Does FBK Stand Out?

1. Annual net interest income growth of 14.4% over the last five years was superb and indicates its market share increased during this cycle
2. Projected net interest income growth of 32.6% for the next 12 months is above its five-year trend, pointing to accelerating demand
3. Earnings per share have massively outperformed its peers over the last two years, increasing by 6% annually

At $53.35 per share, FB Financial trades at 1.4x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our 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 Comfort Systems (+782% 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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