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. Keeping that in mind, here are two small-cap stocks that could be the next 100 baggers and one that may have trouble.
One Small-Cap Stock to Sell:
BancFirst (BANF)
Market Cap: $3.72 billion
Operating as a "super community bank" with a decentralized management approach that emphasizes local responsiveness, BancFirst Corporation (NASDAQ: BANF) operates as a financial holding company providing commercial banking services to retail customers and small to medium-sized businesses primarily in Oklahoma and Texas.
Why Does BANF Fall Short?
- 7.8% annual revenue growth over the last two years was slower than its banking peers
- Estimated net interest income growth of 4.7% for the next 12 months implies demand will slow from its five-year trend
- Overall productivity is expected to decrease over the next year as Wall Street thinks its efficiency ratio will degrade by 2 percentage points
BancFirst’s stock price of $110.75 implies a valuation ratio of 1.8x forward P/B. Check out our free in-depth research report to learn more about why BANF doesn’t pass our bar.
Two Small-Cap Stocks to Watch:
Herbalife (HLF)
Market Cap: $1.18 billion
With the first products sold out of the trunk of the founder’s car, Herbalife (NYSE: HLF) today offers a portfolio of shakes, supplements, personal care products, and weight management programs to help customers reach their nutritional and fitness goals.
Why Does HLF Catch Our Eye?
- Unique products and pricing power result in a best-in-class gross margin of 86%
- Free cash flow margin jumped by 4 percentage points over the last year, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
At $11.24 per share, Herbalife trades at 0.2x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Piper Sandler (PIPR)
Market Cap: $5.46 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 Could PIPR Be a Winner?
- Market share has increased this cycle as its 19.6% annual revenue growth over the last two years was exceptional
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 34.8% annually, topping its revenue gains
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
Piper Sandler is trading at $77.99 per share, or 2.6x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
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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 Kadant (+351% five-year return). Find your next big winner with StockStory today.
