3 Russell 2000 Stocks That Fall Short

Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names. But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses.

Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. Keeping that in mind, here are three Russell 2000 stocks to steer clear of and some alternatives to watch instead.

Zevia (ZVIA)

Market Cap: $129.4 million

With a primary focus on soda but also a presence in energy drinks and teas, Zevia (NYSE:ZVIA) is a better-for-you beverage company.

Why Are We Hesitant About ZVIA?

1. Sales were flat over the last three years, indicating it’s failed to expand its business
2. Subscale operations are evident in its revenue base of $162.8 million, meaning it has fewer distribution channels than its larger rivals
3. Suboptimal cost structure is highlighted by its history of operating margin losses

Zevia’s stock price of $1.85 implies a valuation ratio of 235.4x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why ZVIA doesn’t pass our bar.

Target Hospitality (TH)

Market Cap: $757.3 million

Building mini-communities at places such as oil drilling sites, Target Hospitality (NASDAQ:TH) is a provider of specialty workforce lodging accommodations and services.

Why Is TH Risky?

1. Performance surrounding its utilized beds has lagged its peers
2. Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 10.1% annually
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

Target Hospitality is trading at $7.59 per share, or 15.6x forward EV-to-EBITDA. If you’re considering TH for your portfolio, see our FREE research report to learn more.

United Bankshares (UBSI)

Market Cap: $5.77 billion

With roots dating back to 1982 and a strong presence in the Mid-Atlantic region, United Bankshares (NASDAQ:UBSI) is a bank holding company that provides commercial and retail banking services through its United Bank subsidiary across multiple states.

Why Do We Think UBSI Will Underperform?

1. Muted 4.5% annual revenue growth over the last two years shows its demand lagged behind its banking peers
2. Earnings per share lagged its peers over the last five years as they only grew by 3.9% annually
3. Estimated tangible book value per share growth of 6.2% for the next 12 months implies profitability will slow from its two-year trend

At $41.22 per share, United Bankshares trades at 1.1x forward P/B. Dive into our free research report to see why there are better opportunities than UBSI.

Stocks We Like More

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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.