Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings. However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Liberty Broadband (LBRDK)
Market Cap: $7.2 billion
Operating across the United States, Liberty Broadband (NASDAQ:LBRDK) is a provider of high-speed internet, cable television, and telecommunications services across various markets.
Why Does LBRDK Worry Us?
- 3.1% annual revenue growth over the last two years was slower than its business services peers
- Negative free cash flow raises questions about the return timeline for its investments
- 29× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Liberty Broadband is trading at $50.38 per share, or 40.9x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including LBRDK in your portfolio.
European Wax Center (EWCZ)
Market Cap: $160 million
Founded by two siblings, European Wax Center (NASDAQ:EWCZ) is a beauty and waxing salon chain specializing in professional wax services and skincare products.
Why Is EWCZ Not Exciting?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and in-store experience
- Estimated sales for the next 12 months are flat and imply a softer demand environment
- Low returns on capital reflect management’s struggle to allocate funds effectively
European Wax Center’s stock price of $3.69 implies a valuation ratio of 6.9x forward P/E. If you’re considering EWCZ for your portfolio, see our FREE research report to learn more.
Apogee (APOG)
Market Cap: $743.6 million
Involved in the design of the Apple Store on Fifth Avenue in New York City, Apogee (NASDAQ:APOG) sells architectural products and services such as high-performance glass for commercial buildings.
Why Do We Think APOG Will Underperform?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.3% annually over the last two years
- Estimated sales growth of 1% for the next 12 months is soft and implies weaker demand
- Earnings per share have contracted by 8.7% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
At $34 per share, Apogee trades at 8.6x forward P/E. To fully understand why you should be careful with APOG, check out our full research report (it’s free for active Edge members).
High-Quality Stocks for All Market Conditions
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
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-small-cap company Comfort Systems (+782% 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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