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 two small-cap stocks that could be the next 100 baggers and one that could be down big.
One Small-Cap Stock to Sell:
Privia Health (PRVA)
Market Cap: $2.66 billion
Operating in 13 states and the District of Columbia with over 4,300 providers serving more than 4.8 million patients, Privia Health (NASDAQ:PRVA) is a technology-driven company that helps physicians optimize their practices, improve patient experiences, and transition to value-based care models.
Why Does PRVA Worry Us?
- Revenue base of $2.04 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Poor free cash flow margin of 4.3% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Push for growth has led to negative returns on capital, signaling value destruction
Privia Health’s stock price of $21.61 implies a valuation ratio of 22.7x forward P/E. If you’re considering PRVA for your portfolio, see our FREE research report to learn more.
Two Small-Cap Stocks to Watch:
Powell (POWL)
Market Cap: $7.19 billion
Originally a metal-working shop supporting local petrochemical facilities, Powell (NYSE:POWL) has grown from a small Houston manufacturer to a global provider of electrical systems.
Why Will POWL Beat the Market?
- Backlog has averaged 15.4% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 58.2% annually, topping its revenue gains
- Free cash flow margin expanded by 22 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $593.90 per share, Powell trades at 33.4x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Concentrix (CNXC)
Market Cap: $2.14 billion
With a team of approximately 450,000 employees across 75 countries, Concentrix (NASDAQ:CNXC) designs and delivers customer experience solutions that help global brands manage their customer interactions across digital channels and contact centers.
Why Are We Fans of CNXC?
- Annual revenue growth of 17.5% over the past two years was outstanding, reflecting market share gains this cycle
- Economies of scale give it more fixed cost leverage than its smaller competitors
- Respectable free cash flow margin of 6% minimizes the need for external capital because it can finance growth internally
Concentrix is trading at $35.09 per share, or 3.3x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.