The Russell 2000 (^RUT) is home to many small-cap stocks, offering investors the chance to uncover hidden gems before the broader market catches on. However, these companies often come with higher volatility and risk, as their smaller size makes them more vulnerable to economic downturns.
Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. Keeping that in mind, here are two Russell 2000 stocks that could be the next breakout winners and one that may struggle to keep up.
One Stock to Sell:
eXp World (EXPI)
Market Cap: $1.46 billion
Founded in 2009, eXp World (NASDAQ: EXPI) is a real estate company known for its virtual, cloud-based approach to real estate brokerage.
Why Are We Out on EXPI?
- Performance surrounding its transactions has lagged its peers
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 25% annually while its revenue grew
- Poor free cash flow margin of 3.4% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $9.40 per share, eXp World trades at 17.4x forward EV-to-EBITDA. If you’re considering EXPI for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Vicor (VICR)
Market Cap: $7.44 billion
Founded by a researcher at the Massachusetts Institute of Technology, Vicor (NASDAQ: VICR) provides electrical power conversion and delivery products for a range of industries.
Why Do We Watch VICR?
- Annual revenue growth of 9.9% over the last five years beat the sector average and underscores the unique value of its offerings
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 26.1% outpaced its revenue gains
- Free cash flow margin grew by 21.8 percentage points over the last five years, giving the company more chips to play with
Vicor is trading at $167.85 per share, or 82.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Pathward Financial (CASH)
Market Cap: $1.9 billion
Formerly known as Meta Financial until its 2022 rebranding, Pathward Financial (NASDAQ: CASH) provides banking-as-a-service solutions and commercial finance products, enabling partners to offer financial services like prepaid cards, payment processing, and lending options.
Why Will CASH Outperform?
- Unique value proposition resonates with borrowers, as seen in its above-market 13.7% annual net interest income growth over the last five years
- Differentiated product suite is reflected in its Strong performance of its loan book results in a High-yielding loan book and low cost of funds lead to a best-in-class net interest margin of 7.1%
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 25% exceeded its revenue gains over the last five years
Pathward Financial’s stock price of $85.74 implies a valuation ratio of 2x forward P/B. Is now the time to initiate a position? See for yourself 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 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
