3 Russell 2000 Stocks That Fall Short

The Russell 2000 (^RUT) is home to many small-cap stocks, offering investors the chance to uncover hidden gems before the broader market catches on. However, these companies often come with higher volatility and risk, as their smaller size makes them more vulnerable to economic downturns.

Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. That said, here are three Russell 2000 stocks to steer clear of and some alternatives to watch instead.

Titan International (TWI)

Market Cap: $541.2 million

Acquiring Goodyear’s farm tire business in 2005, Titan (NSYE:TWI) is a manufacturer and supplier of wheels, tires, and undercarriages used in off-highway vehicles such as construction vehicles.

Why Do We Think TWI Will Underperform?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 7.2% annually over the last two years
2. Diminishing returns on capital suggest its earlier profit pools are drying up
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

Titan International is trading at $8.47 per share, or 23.8x forward P/E. Check out our free in-depth research report to learn more about why TWI doesn’t pass our bar.

JELD-WEN (JELD)

Market Cap: $503 million

Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE:JELD) manufactures doors, windows, and other related building products.

Why Do We Pass on JELD?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

JELD-WEN’s stock price of $5.89 implies a valuation ratio of 92.9x forward P/E. Read our free research report to see why you should think twice about including JELD in your portfolio.

Ziff Davis (ZD)

Market Cap: $1.61 billion

Originally a pioneering technology publisher founded in 1927 that became famous for PC Magazine, Ziff Davis (NASDAQ:ZD) operates a portfolio of digital media brands and subscription services across technology, shopping, gaming, healthcare, and cybersecurity markets.

Why Is ZD Risky?

1. Sales were flat over the last five years, indicating it’s failed to expand this cycle
2. Sales over the last five years were less profitable as its earnings per share fell by 1.7% annually while its revenue was flat
3. Free cash flow margin dropped by 15.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up

At $39.20 per share, Ziff Davis trades at 5.7x forward P/E. Dive into our free research report to see why there are better opportunities than ZD.

Stocks We Like More

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.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our 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-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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.