Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings. However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
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 is one small-cap stock that could amplify your portfolio’s returns and two that could be down big.
Two Small-Cap Stocks to Sell:
Yext (YEXT)
Market Cap: $1.05 billion
Built to solve the problem of inconsistent business information scattered across the internet, Yext (NYSE:YEXT) provides a digital presence platform that helps businesses manage their information across websites, maps, apps, and search engines.
Why Do We Steer Clear of YEXT?
- Average ARR growth of 9.1% over the last year has disappointed, suggesting it’s had a hard time winning long-term deals and renewals
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
- Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 3.4 percentage points
At $8.48 per share, Yext trades at 2.5x forward price-to-sales. To fully understand why you should be careful with YEXT, check out our full research report (it’s free for active Edge members).
Vontier (VNT)
Market Cap: $5.51 billion
A spin-off of a spin-off, Vontier (NYSE:VNT) provides electronic products and systems to the transportation, automotive, and manufacturing sectors.
Why Is VNT Risky?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- Eroding returns on capital suggest its historical profit centers are aging
Vontier’s stock price of $37.96 implies a valuation ratio of 11.3x forward P/E. Read our free research report to see why you should think twice about including VNT in your portfolio.
One Small-Cap Stock to Buy:
FB Financial (FBK)
Market Cap: $2.94 billion
Founded in 1906 and operating through more than a century of economic cycles, FB Financial (NYSE:FBK) operates FirstBank, providing commercial and consumer banking services across Tennessee, Kentucky, Alabama, and North Georgia.
Why Is FBK a Good Business?
- Annual net interest income growth of 15.2% over the past five years was outstanding, reflecting market share gains this cycle
- Market share is on track to rise over the next 12 months as its 27.4% projected net interest income growth implies demand will accelerate from its five-year trend
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 8.7% outpaced its revenue gains
FB Financial is trading at $55.06 per share, or 1.5x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at 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 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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