Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.
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 two small-cap stocks that could amplify your portfolio’s returns and one best left ignored.
One Small-Cap Stock to Sell:
Green Plains (GPRE)
Market Cap: $1.07 billion
Operating one of North America's largest ethanol platforms with capacity to process 310 million bushels of corn annually, Green Plains (NASDAQ:GPRE) operates ten biorefineries that convert corn into ethanol for fuel, distillers grains for animal feed, and renewable corn oil.
Why Are We Out on GPRE?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3.5% annually over the last five years
- High extraction costs and unfavorable asset economics are reflected in its low gross margin of 5.8%
- Negative free cash flow raises questions about the return timeline for its investments
Green Plains is trading at $15.24 per share, or 9x forward P/E. Check out our free in-depth research report to learn more about why GPRE doesn’t pass our bar.
Two Small-Cap Stocks to Watch:
LegalZoom (LZ)
Market Cap: $1.12 billion
Founded by famous lawyer Robert Shapiro, LegalZoom (NASDAQ:LZ) offers online legal services and documentation assistance for individuals and businesses.
Why Do We Like LZ?
- Subscription Units are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Strong engagement trends coupled with 17.2% annual growth in its average revenue per user demonstrate its platform’s stickiness with die-hard customers
- Disciplined cost controls and effective management resulted in a strong two-year EBITDA margin of 23.1%, and its operating leverage amplified its profits over the last few years
At $6.35 per share, LegalZoom trades at 4.5x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
Oscar Health (OSCR)
Market Cap: $9.35 billion
Founded in 2012 to simplify the notoriously complex American healthcare system, Oscar Health (NYSE:OSCR) is a technology-focused health insurance company that offers individual and small group health plans through its cloud-native platform.
Why Will OSCR Beat the Market?
- Annual revenue growth of 45.5% over the past two years was outstanding, reflecting market share gains this cycle
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 37.4% annually
- Free cash flow margin jumped by 23.8 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Oscar Health’s stock price of $30.32 implies a valuation ratio of 19.1x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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.