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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here is one small-cap stock that could amplify your portfolio’s returns and two that could be down big.
Two Small-Cap Stocks to Sell:
Sunrun (RUN)
Market Cap: $4.22 billion
Helping homeowners use solar energy to power their homes, Sunrun (NASDAQ: RUN) provides residential solar electricity, specializing in panel installation and leasing services.
Why Does RUN Worry Us?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Negative free cash flow raises questions about the return timeline for its investments
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Sunrun’s stock price of $18.21 implies a valuation ratio of 43.4x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including RUN in your portfolio.
NBT Bancorp (NBTB)
Market Cap: $2.38 billion
Tracing its roots back to 1856 when it first opened its doors in Norwich, New York, NBT Bancorp (NASDAQ: NBTB) is a community-oriented financial institution providing banking, wealth management, and insurance services to individuals and businesses across the northeastern United States.
Why Does NBTB Fall Short?
- Annual revenue growth of 8.5% over the last five years was below our standards for the banking sector
- Annual net interest income growth of 9.7% over the last five years was below our standards for the banking sector
- Performance over the past five years shows its incremental sales were less profitable, as its 4.3% annual earnings per share growth trailed its revenue gains
At $45.51 per share, NBT Bancorp trades at 1.2x forward P/B. Dive into our free research report to see why there are better opportunities than NBTB.
One Small-Cap Stock to Watch:
SmartRent (SMRT)
Market Cap: $304.6 million
Founded by an employee at a real estate rental company, SmartRent (NYSE: SMRT) provides smart home devices and software for multifamily residential properties, single-family rental homes, and student housing communities.
Why Should SMRT Be on Your Watchlist?
- Offerings are pivotal for their customers' operations as its ARR has averaged 22.9% growth over the past two years
- Earnings per share have massively outperformed its peers over the last three years, increasing by 24.1% annually
- Historical investments are beginning to pay off as its returns on capital are growing
SmartRent is trading at $1.61 per share, or 79.4x forward EV-to-EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
