3 Small-Cap Stocks We're Skeptical Of

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.

Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.

Dole (DOLE)

Market Cap: $1.26 billion

Known for its delicious pineapples and Hawaiian roots, Dole (NYSE:DOLE) is a global agricultural company specializing in fresh fruits and vegetables.

Why Do We Pass on DOLE?

1. Flat sales over the last three years suggest it must innovate and find new ways to grow
2. Easily substituted products (and therefore stiff competition) result in an inferior gross margin of 8.4% that must be offset through higher volumes
3. Subpar operating margin of 2.8% constrains its ability to invest in process improvements or effectively respond to new competitive threats

Dole’s stock price of $13.20 implies a valuation ratio of 9.7x forward P/E. Read our free research report to see why you should think twice about including DOLE in your portfolio.

LSI (LYTS)

Market Cap: $653.2 million

Enhancing commercial environments, LSI (NASDAQ:LYTS) provides lighting and display solutions for businesses and retailers.

Why Does LYTS Fall Short?

1. Annual revenue growth of 7.4% over the last two years was below our standards for the industrials sector
2. Estimated sales growth of 3.5% for the next 12 months implies demand will slow from its two-year trend
3. Annual earnings per share growth of 3% underperformed its revenue over the last two years, partly because it diluted shareholders

LSI is trading at $22.13 per share, or 19.2x forward P/E. If you’re considering LYTS for your portfolio, see our FREE research report to learn more.

CVB Financial (CVBF)

Market Cap: $2.56 billion

With roots dating back to 1974 and a focus on serving small and medium-sized businesses, CVB Financial (NASDAQ:CVBF) operates Citizens Business Bank, providing banking, lending, and trust services to businesses and individuals across California.

Why Are We Hesitant About CVBF?

1. 1.4% annual net interest income growth over the last five years was slower than its banking peers
2. Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 9% annually, worse than its revenue
3. Muted 2.8% annual tangible book value per share growth over the last five years shows its capital generation lagged behind its banking peers

At $18.54 per share, CVB Financial trades at 1.1x forward P/B. To fully understand why you should be careful with CVBF, check out our full research report (it’s free for active Edge members).

High-Quality Stocks for All Market Conditions

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Don’t let fear keep you from great opportunities and take a look at Top 6 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).

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