1 Small-Cap Stock to Research Further 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.

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. Keeping that in mind, here is one small-cap stock that could be the next big thing and two best left ignored.

Two Small-Cap Stocks to Sell:

eHealth (EHTH)

Market Cap: $128.9 million

Aiming to address a high-stakes and often confusing decision, eHealth (NASDAQ:EHTH) guides consumers through health insurance enrollment and related topics.

Why Does EHTH Worry Us?

1. Intense competition is diverting traffic from its platform as its estimated membership fell by 2.7% annually
2. Projected sales decline of 4.4% for the next 12 months points to a tough demand environment ahead
3. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value

eHealth’s stock price of $4.19 implies a valuation ratio of 3.1x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than EHTH.

UFP Technologies (UFPT)

Market Cap: $1.72 billion

With expertise dating back to 1963 in specialized materials and precision manufacturing, UFP Technologies (NASDAQ:UFPT) designs and manufactures custom solutions for medical devices, sterile packaging, and other highly engineered products for healthcare and industrial applications.

Why Is UFPT Not Exciting?

1. Revenue base of $598 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
2. Estimated sales growth of 4.6% for the next 12 months implies demand will slow from its two-year trend

At $223.67 per share, UFP Technologies trades at 21.6x forward P/E. If you’re considering UFPT for your portfolio, see our FREE research report to learn more.

One Small-Cap Stock to Watch:

Stock Yards Bank (SYBT)

Market Cap: $2.02 billion

Founded in 1904 in Louisville and named after the city's historic livestock market district, Stock Yards Bancorp (NASDAQ:SYBT) operates a regional bank providing commercial banking, wealth management, and trust services across Kentucky, Indiana, and Ohio.

Why Should SYBT Be on Your Watchlist?

1. Annual revenue growth of 16.7% over the past five years was outstanding, reflecting market share gains this cycle
2. Market share has increased this cycle as its 17.1% annual net interest income growth over the last five years was exceptional
3. Annual tangible book value per share growth of 18.5% over the past two years was outstanding, reflecting strong capital accumulation this cycle

Stock Yards Bank is trading at $68.29 per share, or 1.9x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.

High-Quality Stocks for All Market Conditions

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.