1 Small-Cap Stock with Promising Prospects and 2 to Approach with Caution

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 100 bagger and two that could be down big.

Two Small-Cap Stocks to Sell:

eHealth (EHTH)

Market Cap: $128.6 million

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

Why Do We Think Twice About EHTH?

1. Struggled with new customer acquisition as its estimated membership averaged 1.8% declines
2. Forecasted revenue decline of 3.4% for the upcoming 12 months implies demand will fall off a cliff
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

eHealth is trading at $4.23 per share, or 2.8x forward EV/EBITDA. Read our free research report to see why you should think twice about including EHTH in your portfolio.

Utz (UTZ)

Market Cap: $1.18 billion

Tracing its roots back to 1921 when Bill and Salie Utz began making potato chips in their kitchen, Utz Brands (NYSE:UTZ) offers salty snacks such as potato chips, tortilla chips, pretzels, cheese snacks, and ready-to-eat popcorn, among others.

Why Are We Out on UTZ?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Modest revenue base of $1.41 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
3. Low returns on capital reflect management’s struggle to allocate funds effectively

At $13.51 per share, Utz trades at 15.7x forward P/E. Dive into our free research report to see why there are better opportunities than UTZ.

One Small-Cap Stock to Watch:

Cadre (CDRE)

Market Cap: $1.38 billion

Originally known as Safariland, Cadre (NYSE:CDRE) specializes in manufacturing and distributing safety and survivability equipment for first responders.

Why Are We Fans of CDRE?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 9.7% annual sales growth over the last two years
2. Exciting sales outlook for the upcoming 12 months calls for 19.3% growth, an acceleration from its two-year trend
3. Earnings per share grew by 19.7% annually over the last two years and trumped its peers

Cadre’s stock price of $33.96 implies a valuation ratio of 21.4x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.

Stocks We Like Even More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free.