3 Small-Cap Stocks We Keep Off Our Radar

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.

The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.

ON24 (ONTF)

Market Cap: $225.5 million

Powering over 1,700 companies' virtual marketing efforts since 1998, ON24 (NYSE:ONTF) provides a cloud-based platform that enables businesses to create interactive digital experiences and capture actionable data from customer engagement.

Why Do We Pass on ONTF?

1. Billings have dropped by 3.3% over the last year, suggesting it might have to lower prices to stimulate growth
2. Projected sales decline of 4.6% over the next 12 months indicates demand will continue deteriorating
3. Historical operating margin losses point to an inefficient cost structure

ON24’s stock price of $5.33 implies a valuation ratio of 1.7x forward price-to-sales. Read our free research report to see why you should think twice about including ONTF in your portfolio.

ACV Auctions (ACVA)

Market Cap: $1.46 billion

Founded in 2014, ACV Auctions (NASDAQ:ACVA) is an online auction marketplace for car dealers and wholesalers to buy and sell used cars.

Why Are We Hesitant About ACVA?

1. Bad unit economics and steep infrastructure costs are reflected in its low gross margin of 26.2%
2. Highly competitive market means it’s on the never-ending treadmill of sales and marketing spend
3. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 2.7% for the last two years

At $8.36 per share, ACV Auctions trades at 15.1x forward EV/EBITDA. If you’re considering ACVA for your portfolio, see our FREE research report to learn more.

AdaptHealth (AHCO)

Market Cap: $1.15 billion

With a network of approximately 680 locations serving patients across all 50 states, AdaptHealth (NASDAQ:AHCO) provides home medical equipment, supplies, and related services to patients with chronic conditions like sleep apnea, diabetes, and respiratory disorders.

Why Do We Think Twice About AHCO?

1. Sales trends were unexciting over the last two years as its 2.7% annual growth was below the typical healthcare company
2. Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 1.1% annually
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

AdaptHealth is trading at $8.77 per share, or 8.7x forward P/E. To fully understand why you should be careful with AHCO, check out our full research report (it’s free for active Edge members).

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.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our 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-small-cap company Exlservice (+354% 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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