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 three small-cap stocks to swipe left on and some alternatives you should look into instead.
Casella Waste Systems (CWST)
Market Cap: $6.65 billion
Starting with the founder picking up garbage with a pickup truck he purchased using savings from high school, Casella (NASDAQ: CWST) offers waste management services for businesses, residents, and the government.
Why Does CWST Fall Short?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 5 percentage points
- ROIC of 6% reflects management’s challenges in identifying attractive investment opportunities, and its falling returns suggest its earlier profit pools are drying up
Casella Waste Systems’s stock price of $104.80 implies a valuation ratio of 82.1x forward P/E. Dive into our free research report to see why there are better opportunities than CWST.
Omnicell (OMCL)
Market Cap: $2.29 billion
Driven by the vision of an "Autonomous Pharmacy" with zero medication errors, Omnicell (NASDAQ: OMCL) provides medication management automation and adherence tools that help healthcare systems and pharmacies reduce errors and improve efficiency.
Why Do We Avoid OMCL?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 9.5 percentage points
- Earnings per share fell by 5.4% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
At $50.99 per share, Omnicell trades at 28.5x forward P/E. If you’re considering OMCL for your portfolio, see our FREE research report to learn more.
Lake City Bank (LKFN)
Market Cap: $1.52 billion
Dating back to 1872 and deeply rooted in Indiana's communities, Lakeland Financial Corporation (NASDAQ: LKFN) operates Lake City Bank, providing commercial and consumer banking services throughout Northern and Central Indiana.
Why Do We Think Twice About LKFN?
- Annual revenue growth of 2.6% over the last two years was below our standards for the banking sector
- Muted 6.5% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
- Incremental sales over the last five years were less profitable as its 3.5% annual earnings per share growth lagged its revenue gains
Lake City Bank is trading at $59.48 per share, or 2x forward P/B. To fully understand why you should be careful with LKFN, check out our full research report (it’s free).
Stocks We Like 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 5 Growth Stocks for this month. 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
