Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names. But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses.
Picking the right small caps isn’t easy, and that’s exactly why StockStory exists - to help you focus on the best opportunities. That said, here is one Russell 2000 stock that could deliver strong gains and two that may struggle to keep up.
Two Stocks to Sell:
Werner (WERN)
Market Cap: $2.69 billion
Conducting business in over a 100 countries, Werner (NASDAQ: WERN) offers full-truckload, less-than-truckload, and intermodal delivery services.
Why Do We Avoid WERN?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.3% annually over the last two years
- Earnings per share fell by 44.6% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Werner’s stock price of $45.43 implies a valuation ratio of 34.2x forward P/E. To fully understand why you should be careful with WERN, check out our full research report (it’s free).
Navient (NAVI)
Market Cap: $796.1 million
Spun off from Sallie Mae in 2014 to handle the company's loan servicing and collection operations, Navient (NASDAQ: NAVI) provides education loan servicing and business processing solutions that help manage federal student loans, private education loans, and government services.
Why Are We Out on NAVI?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 21.3% annually over the last five years
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Debt-to-equity ratio of 18.9× shows the firm has taken on excessive debt, leaving little room for error
At $8.39 per share, Navient trades at 11.5x forward P/E. If you’re considering NAVI for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Remitly (RELY)
Market Cap: $4.95 billion
With Amazon founder Jeff Bezos as an early investor, Remitly (NASDAQ: RELY) is an online platform that enables consumers to safely and quickly send money globally.
Why Is RELY a Top Pick?
- Active Customers have grown by 28.4% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 247% outpaced its revenue gains
- Free cash flow margin expanded by 35.2 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends
Remitly is trading at $23.55 per share, or 11.4x forward EV/EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
