2 Small-Cap Stocks for Long-Term Investors and 1 We Ignore

Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.

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. That said, here are two small-cap stocks that could be the next big thing and one best left ignored.

One Small-Cap Stock to Sell:

Workiva (WK)

Market Cap: $3.86 billion

Nicknamed "the Excel killer" by some finance professionals for its ability to eliminate spreadsheet chaos, Workiva (NYSE:WK) provides a cloud-based platform that enables organizations to streamline financial reporting, ESG, and compliance processes with connected data and automation.

Why Do We Think Twice About WK?

1. Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
2. Free cash flow margin is forecasted to shrink by 3.1 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors

Workiva is trading at $66.97 per share, or 4.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than WK.

Two Small-Cap Stocks to Watch:

Construction Partners (ROAD)

Market Cap: $7.16 billion

Founded in 2001, Construction Partners (NASDAQ:ROAD) is a civil infrastructure company that builds and maintains roads, highways, and other infrastructure projects.

Why Are We Backing ROAD?

1. Annual revenue growth of 37.5% over the last two years was superb and indicates its market share increased during this cycle
2. Additional sales over the last two years increased its profitability as the 49.6% annual growth in its earnings per share outpaced its revenue
3. Free cash flow margin grew by 7.8 percentage points over the last five years, giving the company more chips to play with

Construction Partners’s stock price of $127.04 implies a valuation ratio of 42.7x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.

KBR (KBR)

Market Cap: $5.60 billion

Known for projects like the construction of Guantanamo Bay, KBR provides professional services and technologies, specializing in engineering, construction, and government services sectors.

Why Could KBR Be a Winner?

1. Operating margin improvement of 6.6 percentage points over the last five years demonstrates its ability to scale efficiently
2. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 17.9% exceeded its revenue gains over the last five years
3. Improving returns on capital reflect management’s ability to monetize investments

At $44.03 per share, KBR trades at 11x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even 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 6 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.