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 big thing and one that could be down big.
One Small-Cap Stock to Sell:
Lucky Strike (LUCK)
Market Cap: $931.8 million
Born from the transformation of traditional bowling alleys into modern entertainment destinations, Lucky Strike (NYSE: LUCK) operates bowling alleys and other entertainment venues with upscale amenities, arcade games, and food and beverage services across North America.
Why Are We Bearish on LUCK?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
- High net-debt-to-EBITDA ratio of 8× could force the company to raise capital on unfavorable terms if market conditions deteriorate
Lucky Strike is trading at $6.79 per share, or 68.7x forward P/E. To fully understand why you should be careful with LUCK, check out our full research report (it’s free).
Two Small-Cap Stocks to Watch:
Coursera (COUR)
Market Cap: $1.53 billion
Founded by two Stanford University computer science professors, Coursera (NYSE: COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.
Why Could COUR Be a Winner?
- Platform and reputation resonate with consumers, as seen in its above-market 15.1% annual sales growth over the last three years
- Exciting sales outlook for the upcoming 12 months calls for 68% growth, an acceleration from its three-year trend
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 68% annually, topping its revenue gains
Coursera’s stock price of $5.78 implies a valuation ratio of 1.4x forward EV/EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Ryan Specialty (RYAN)
Market Cap: $5.23 billion
Founded in 2010 by insurance industry veteran Patrick Ryan, Ryan Specialty (NYSE: RYAN) is a wholesale insurance broker and underwriting manager that helps retail brokers place complex or hard-to-place risks with insurance carriers.
Why Should You Buy RYAN?
- Annual revenue growth of 18.7% over the last two years was superb and indicates its market share increased during this cycle
- Earnings per share grew by 16.4% annually over the last four years and trumped its peers
- Robust free cash flow margin of 17.5% gives it many options for capital deployment
At $42.22 per share, Ryan Specialty trades at 18.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
