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 is one small-cap stock that could be the next 100 bagger and two that may have trouble.
Two Small-Cap Stocks to Sell:
QuidelOrtho (QDEL)
Market Cap: $2.02 billion
Born from the 2022 merger of Quidel and Ortho Clinical Diagnostics, QuidelOrtho (NASDAQ: QDEL) develops and manufactures diagnostic testing solutions for healthcare providers, from rapid point-of-care tests to complex laboratory instruments and systems.
Why Do We Steer Clear of QDEL?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Free cash flow margin shrank by 21 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
QuidelOrtho’s stock price of $29.21 implies a valuation ratio of 11.7x forward P/E. To fully understand why you should be careful with QDEL, check out our full research report (it’s free for active Edge members).
TFS Financial (TFSL)
Market Cap: $3.70 billion
Tracing its roots back to 1938 during the Great Depression era when savings and loans were vital to homeownership, TFS Financial (NASDAQ: TFSL) is a savings and loan holding company that provides mortgage lending, deposit services, and other retail banking products primarily in Ohio and Florida.
Why Should You Dump TFSL?
- 2.8% annual net interest income growth over the last five years was slower than its banking peers
- Net interest margin of 1.7% reflects its high servicing and capital costs
- Tangible book value per share stagnated over the last two years, limiting its ability to leverage its balance sheet to make additional investments
At $13.55 per share, TFS Financial trades at 2x forward P/B. If you’re considering TFSL for your portfolio, see our FREE research report to learn more.
One Small-Cap Stock to Watch:
Stock Yards Bank (SYBT)
Market Cap: $2.00 billion
Founded in 1904 in Louisville and named after the city's historic livestock market district, Stock Yards Bancorp (NASDAQ: SYBT) operates a regional bank providing commercial banking, wealth management, and trust services across Kentucky, Indiana, and Ohio.
Why Does SYBT Catch Our Eye?
- Market share has increased this cycle as its 16.9% annual net interest income growth over the last five years was exceptional
- Additional sales over the last two years increased its profitability as the 6.7% annual growth in its earnings per share outpaced its revenue
- Capital generation for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust tangible book value per share growth of 25.3%
Stock Yards Bank is trading at $67.80 per share, or 1.9x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 6 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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