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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Bumble (BMBL)
Market Cap: $395.7 million
Started by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ: BMBL) is a leading dating app built with women at the center.
Why Are We Cautious About BMBL?
- Modest 4.8% annual growth in paying users over the last two years indicates potential challenges in customer acquisition and retention
- Platform has lost its luster lately as engagement trends have been sluggish and its average revenue per buyer has declined by 3.9% annually
- Estimated sales decline of 13.7% for the next 12 months implies a challenging demand environment
Bumble is trading at $3.50 per share, or 2.2x forward EV/EBITDA. Read our free research report to see why you should think twice about including BMBL in your portfolio.
Douglas Dynamics (PLOW)
Market Cap: $682.2 million
Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE: PLOW) offers snow and ice equipment for the roads and sidewalks.
Why Are We Hesitant About PLOW?
- Muted 1.8% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- 2.2 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Waning returns on capital imply its previous profit engines are losing steam
Douglas Dynamics’s stock price of $29.61 implies a valuation ratio of 12.6x forward P/E. Check out our free in-depth research report to learn more about why PLOW doesn’t pass our bar.
Privia Health (PRVA)
Market Cap: $2.85 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 Is PRVA Not Exciting?
- 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
- Negative returns on capital show management lost money while trying to expand the business
At $23.21 per share, Privia Health trades at 24.6x forward P/E. To fully understand why you should be careful with PRVA, check out our full research report (it’s free for active Edge members).
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 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-micro-cap company Kadant (+351% 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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