3 Small-Cap Stocks That Fall Short

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 are three small-cap stocks to swipe left on and some alternatives you should look into instead.

3D Systems (DDD)

Market Cap: $289.7 million

Founded by the inventor of stereolithography, 3D Systems (NYSE:DDD) engineers, manufactures, and sells 3D printers and other related products to the aerospace, automotive, healthcare, and consumer goods industries.

Why Should You Sell DDD?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 6.7% annually over the last five years
2. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

3D Systems is trading at $2.27 per share, or 0.7x forward price-to-sales. To fully understand why you should be careful with DDD, check out our full research report (it’s free for active Edge members).

ABM (ABM)

Market Cap: $2.57 billion

With roots dating back to 1909 as a window washing company, ABM Industries (NYSE:ABM) provides integrated facility management, infrastructure, and mobility solutions across various sectors including commercial, manufacturing, education, and aviation.

Why Do We Think Twice About ABM?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Incremental sales over the last two years were less profitable as its 1.2% annual earnings per share growth lagged its revenue gains
3. 6.4 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

At $41.97 per share, ABM trades at 10.7x forward P/E. Check out our free in-depth research report to learn more about why ABM doesn’t pass our bar.

United Community Banks (UCB)

Market Cap: $3.58 billion

Starting as a small community bank in 1950 and expanding through strategic acquisitions across the Southeast, United Community Banks (NYSE:UCB) is a regional bank holding company that provides financial services including loans, deposits, wealth management, and merchant services across the southeastern United States.

Why Does UCB Give Us Pause?

1. Muted 4.1% annual revenue growth over the last two years shows its demand lagged behind its banking peers
2. Net interest margin of 3.4% reflects its high servicing and capital costs
3. 4.7% annual tangible book value per share growth over the last five years was slower than its banking peers

United Community Banks’s stock price of $29.49 implies a valuation ratio of 1x forward P/B. Read our free research report to see why you should think twice about including UCB in your portfolio.

High-Quality Stocks for All Market Conditions

Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.

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).

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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