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.
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 be the next 100 bagger and two that may have trouble.
Two Small-Cap Stocks to Sell:
Covista (CVSA)
Market Cap: $4.50 billion
Formerly known as DeVry Education Group, Covista (NYSE: CVSA) is a global provider of workforce solutions and educational services.
Why Do We Pass on CVSA?
- 16.6% annual revenue growth over the last five years was slower than its consumer discretionary peers
- Projected 5.8 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
- Underwhelming 9.3% return on capital reflects management’s difficulties in finding profitable growth opportunities
Covista is trading at $132.40 per share, or 14.6x forward P/E. Read our free research report to see why you should think twice about including CVSA in your portfolio.
Myriad Genetics (MYGN)
Market Cap: $291.7 million
Founded in 1991 as one of the pioneers in translating genetic discoveries into clinical applications, Myriad Genetics (NASDAQ: MYGN) develops genetic tests that assess disease risk, guide treatment decisions, and provide insights across oncology, women's health, and mental health.
Why Do We Think MYGN Will Underperform?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
- Issuance of new shares over the last five years caused its earnings per share to fall by 7.4% annually while its revenue grew
- Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes
At $3.10 per share, Myriad Genetics trades at 0.4x forward price-to-sales. To fully understand why you should be careful with MYGN, check out our full research report (it’s free).
One Small-Cap Stock to Watch:
EPAM (EPAM)
Market Cap: $5.09 billion
Founded in 1993 during the early days of offshore software development, EPAM Systems (NYSE: EPAM) provides digital engineering, cloud, and AI transformation services to help global enterprises and startups modernize their technology systems and create digital products.
Why Do We Like EPAM?
- Annual revenue growth of 13.1% over the last five years was superb and indicates its market share increased during this cycle
- Earnings per share grew by 11.4% annually over the last five years and easily exceeded the peer group average
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
EPAM’s stock price of $100.44 implies a valuation ratio of 7.4x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
