3 Small-Cap Stocks We Keep Off Our Radar

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. Keeping that in mind, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.

Casella Waste Systems (CWST)

Market Cap: $6.65 billion

Starting with the founder picking up garbage with a pickup truck he purchased using savings from high school, Casella (NASDAQ:CWST) offers waste management services for businesses, residents, and the government.

Why Does CWST Fall Short?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 5 percentage points
3. ROIC of 6% reflects management’s challenges in identifying attractive investment opportunities, and its falling returns suggest its earlier profit pools are drying up

Casella Waste Systems’s stock price of $104.80 implies a valuation ratio of 82.1x forward P/E. Dive into our free research report to see why there are better opportunities than CWST.

Omnicell (OMCL)

Market Cap: $2.29 billion

Driven by the vision of an "Autonomous Pharmacy" with zero medication errors, Omnicell (NASDAQ:OMCL) provides medication management automation and adherence tools that help healthcare systems and pharmacies reduce errors and improve efficiency.

Why Do We Avoid OMCL?

1. Sales stagnated over the last two years and signal the need for new growth strategies
2. Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 9.5 percentage points
3. Earnings per share fell by 5.4% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable

At $50.99 per share, Omnicell trades at 28.5x forward P/E. If you’re considering OMCL for your portfolio, see our FREE research report to learn more.

Lake City Bank (LKFN)

Market Cap: $1.52 billion

Dating back to 1872 and deeply rooted in Indiana's communities, Lakeland Financial Corporation (NASDAQ:LKFN) operates Lake City Bank, providing commercial and consumer banking services throughout Northern and Central Indiana.

Why Do We Think Twice About LKFN?

1. Annual revenue growth of 2.6% over the last two years was below our standards for the banking sector
2. Muted 6.5% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
3. Incremental sales over the last five years were less profitable as its 3.5% annual earnings per share growth lagged its revenue gains

Lake City Bank is trading at $59.48 per share, or 2x forward P/B. To fully understand why you should be careful with LKFN, check out our full research report (it’s free).

Stocks We Like More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 5 Growth Stocks for this month. 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.