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1 Russell 2000 Stock to Target This Week and 2 to Brush Off

NXT Cover Image

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.

The high-risk, high-reward nature of the Russell 2000 makes stock selection critical, and we’re here to guide you toward the right ones. That said, here is one Russell 2000 stock that could deliver strong gains and two that may face some trouble.

Two Stocks to Sell:

Integer Holdings (ITGR)

Market Cap: $4.22 billion

With its name reflecting the mathematical term for "whole" or "complete," Integer Holdings (NYSE: ITGR) is a medical device outsource manufacturer that produces components and systems for cardiac, vascular, neurological, and other medical applications.

Why Is ITGR Not Exciting?

  1. Muted 6.5% annual revenue growth over the last five years shows its demand lagged behind its healthcare peers
  2. Revenue base of $1.75 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
  3. Free cash flow margin dropped by 7.7 percentage points over the last five years, implying the company became more capital intensive as competition picked up

Integer Holdings’s stock price of $121 implies a valuation ratio of 19.2x forward P/E. Dive into our free research report to see why there are better opportunities than ITGR.

CSG (CSGS)

Market Cap: $1.82 billion

Powering billions of critical customer interactions annually, CSG Systems (NASDAQ: CSGS) provides cloud-based software platforms that help companies manage customer interactions, process payments, and monetize their services.

Why Do We Pass on CSGS?

  1. 3.4% annual revenue growth over the last two years was slower than its business services peers
  2. Projected sales growth of 2.5% for the next 12 months suggests sluggish demand
  3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

CSG is trading at $66.04 per share, or 13.8x forward P/E. Read our free research report to see why you should think twice about including CSGS in your portfolio.

One Stock to Buy:

Nextracker (NXT)

Market Cap: $9.80 billion

With its technology playing a key role in the massive 1.2 gigawatt Noor Abu Dhabi solar farm project, Nextracker (NASDAQ: NXT) is a provider of solar tracker systems that help solar panels follow the sun.

Why Are We Bullish on NXT?

  1. Average backlog growth of 46.5% over the past two years shows it has a steady sales pipeline that will drive future orders
  2. Free cash flow margin grew by 13.6 percentage points over the last five years, giving the company more chips to play with
  3. Improving returns on capital reflect management’s ability to monetize investments

At $66.63 per share, Nextracker trades at 17x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum 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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