1 Small-Cap Stock with Solid Fundamentals and 2 Facing Headwinds

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:

Redwire (RDW)

Market Cap: $1.30 billion

Based in Jacksonville, Florida, Redwire (NYSE:RDW) is a provider of systems and components used in space infrastructure.

Why Should You Sell RDW?

1. Historically negative EPS raises concerns for risk-averse investors and makes its earnings potential harder to gauge
2. 27.3 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
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

Redwire is trading at $9.10 per share, or 10.2x forward EV-to-EBITDA. If you’re considering RDW for your portfolio, see our FREE research report to learn more.

Privia Health (PRVA)

Market Cap: $2.74 billion

Operating in 13 states and the District of Columbia with over 4,300 providers serving more than 4.8 million patients, Privia Health (NASDAQ:PRVA) is a technology-driven company that helps physicians optimize their practices, improve patient experiences, and transition to value-based care models.

Why Does PRVA Give Us Pause?

1. Subscale operations are evident in its revenue base of $1.9 billion, meaning it has fewer distribution channels than its larger rivals
2. Poor free cash flow margin of 4.3% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
3. Push for growth has led to negative returns on capital, signaling value destruction

At $22.32 per share, Privia Health trades at 25.2x forward P/E. To fully understand why you should be careful with PRVA, check out our full research report (it’s free).

One Small-Cap Stock to Watch:

Globus Medical (GMED)

Market Cap: $7.81 billion

With operations spanning 64 countries and a portfolio of over 10 new products launched in 2023 alone, Globus Medical (NYSE:GMED) develops and sells implantable devices, surgical instruments, and technology solutions for spine, orthopedic, and neurosurgical procedures.

Why Does GMED Stand Out?

1. Constant currency growth averaged 62.3% over the past two years, showing it can expand globally regardless of the macroeconomic environment
2. Forecasted revenue growth of 14% for the next 12 months indicates its momentum over the last two years is sustainable
3. Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 20.2% annually

Globus Medical’s stock price of $57.84 implies a valuation ratio of 16.9x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

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 9 Market-Beating Stocks. 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 Kadant (+351% 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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