The Russell 2000 (^RUT) is packed with potential breakout stocks, thanks to its focus on smaller companies with high growth potential. However, smaller size also means these businesses often lack the resilience and financial flexibility of large-cap firms, making careful selection crucial.
Picking the right small caps isn’t easy, and that’s exactly why StockStory exists - to help you focus on the best opportunities. Keeping that in mind, here is one Russell 2000 stock that could be the next big thing and two that may face some trouble.
Two Stocks to Sell:
ON24 (ONTF)
Market Cap: $345.5 million
Powering over 1,700 companies' virtual marketing efforts since 1998, ON24 (NYSE: ONTF) provides a cloud-based platform that enables businesses to create interactive digital experiences and capture actionable data from customer engagement.
Why Do We Steer Clear of ONTF?
- Offerings couldn’t generate interest over the last year as its billings have averaged 5.8% declines
- Sales are projected to be flat over the next 12 months and imply weak demand
- Historical operating margin losses point to an inefficient cost structure
ON24 is trading at $8.09 per share, or 2.5x forward price-to-sales. If you’re considering ONTF for your portfolio, see our FREE research report to learn more.
ArcBest (ARCB)
Market Cap: $1.99 billion
Historically owning furniture, banking, and other subsidiaries, ArcBest (NASDAQ: ARCB) offers full-truckload, less-than-truckload, and intermodal deliveries of freight.
Why Is ARCB Risky?
- Disappointing unit sales over the past two years imply it may need to invest in improvements to get back on track
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
- Eroding returns on capital suggest its historical profit centers are aging
At $89.22 per share, ArcBest trades at 18.9x forward P/E. Check out our free in-depth research report to learn more about why ARCB doesn’t pass our bar.
One Stock to Buy:
Piper Sandler (PIPR)
Market Cap: $5.27 billion
Tracing its roots back to 1895 and rebranded from Piper Jaffray in 2020, Piper Sandler (NYSE: PIPR) is an investment bank that provides advisory services, capital raising, institutional brokerage, and research for corporations, governments, and institutional investors.
Why Will PIPR Outperform?
- Impressive 18.9% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Additional sales over the last two years increased its profitability as the 38.3% annual growth in its earnings per share outpaced its revenue
- Balance sheet strength has increased this cycle as its 13.4% annual tangible book value per share growth over the last two years was exceptional
Piper Sandler’s stock price of $294.47 implies a valuation ratio of 15.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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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.
