1 Small-Cap Stock for Long-Term Investors and 2 We Turn Down

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 is one small-cap stock that could be the next 100 bagger and two best left ignored.

Two Small-Cap Stocks to Sell:

Shutterstock (SSTK)

Market Cap: $667.4 million

Originally featuring a library that included many of founder Jon Oringer’s photos, Shutterstock (NYSE:SSTK) is now a digital platform where customers can license and use hundreds of millions of pieces of content.

Why Does SSTK Give Us Pause?

1. Decision to emphasize platform growth over monetization has contributed to 18.6% annual declines in its average revenue per request
2. Forecasted revenue decline of 1% for the upcoming 12 months implies demand will fall off a cliff
3. Performance over the past three years was negatively impacted by new share issuances as its earnings per share grew slower than its revenue

Shutterstock’s stock price of $18.82 implies a valuation ratio of 3.1x forward EV/EBITDA. Read our free research report to see why you should think twice about including SSTK in your portfolio.

Tilly's (TLYS)

Market Cap: $54.85 million

With an emphasis on skate and surf culture, Tilly’s (NYSE:TLYS) is a specialty retailer that sells clothing, footwear, and accessories geared towards fashion-forward teens and young adults.

Why Do We Avoid TLYS?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
3. Negative earnings profile makes it challenging to secure favorable financing terms from lenders

Tilly's is trading at $1.81 per share, or 0.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than TLYS.

One Small-Cap Stock to Buy:

Remitly (RELY)

Market Cap: $2.85 billion

With Amazon founder Jeff Bezos as an early investor, Remitly (NASDAQ:RELY) is an online platform that enables consumers to safely and quickly send money globally.

Why Should You Buy RELY?

1. Active Customers have grown by 31.9% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 74.6% over the last three years outstripped its revenue performance
3. Free cash flow margin jumped by 24.7 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

At $13.72 per share, Remitly trades at 9x forward EV/EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.

High-Quality Stocks for All Market Conditions

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in 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 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.