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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here is one small-cap stock that could be the next big thing and two that could be down big.
Two Small-Cap Stocks to Sell:
PlayStudios (MYPS)
Market Cap: $60.05 million
Founded by a team of former gaming industry executives, PlayStudios (NASDAQ: MYPS) offers free-to-play digital casino games.
Why Do We Think MYPS Will Underperform?
- Products and services aren't resonating with the market as its revenue declined by 1.2% annually over the last five years
- Historically negative EPS casts doubt for cautious investors and clouds its long-term earnings prospects
- Low free cash flow margin of 14.2% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
PlayStudios is trading at $0.48 per share, or 0.3x forward price-to-sales. Read our free research report to see why you should think twice about including MYPS in your portfolio.
Levi's (LEVI)
Market Cap: $8.93 billion
Credited for inventing the first pair of blue jeans in 1873, Levi's (NYSE: LEVI) is an apparel company renowned for its iconic denim products and classic American style.
Why Do We Avoid LEVI?
- Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 8% for the last two years
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $22.89 per share, Levi's trades at 15.1x forward P/E. Dive into our free research report to see why there are better opportunities than LEVI.
One Small-Cap Stock to Buy:
NCR Atleos (NATL)
Market Cap: $3.12 billion
Spun off from NCR Voyix in 2023 to focus exclusively on self-service banking technology, NCR Atleos (NYSE: NATL) provides self-directed banking solutions including ATM and interactive teller machine technology, software, services, and a surcharge-free ATM network for financial institutions and retailers.
Why Are We Backing NATL?
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 82% outpaced its revenue gains
NCR Atleos’s stock price of $42.15 implies a valuation ratio of 9x forward P/E. Is now a good time to buy? Find out 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 9 Market-Beating Stocks. 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.
