Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings. However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
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 are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Dropbox (DBX)
Market Cap: $7.67 billion
Originally named after the founders' tendency to "drop" files into a shared folder, Dropbox (NASDAQ:DBX) provides a content collaboration platform that helps individuals and teams store, organize, share, and work on files from anywhere.
Why Do We Think DBX Will Underperform?
- Flat billings over the last year suggest it may need to improve its products, pricing, or go-to-market strategy to reinvigorate demand
- Sales are projected to tank by 1.3% over the next 12 months as demand evaporates
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 1.9 percentage points
Dropbox is trading at $29.65 per share, or 3.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than DBX.
Silgan Holdings (SLGN)
Market Cap: $4.20 billion
Established in 1987, Silgan Holdings (NYSE:SLGN) is a supplier of rigid packaging for consumer goods products, specializing in metal containers, closures, and plastic packaging.
Why Do We Pass on SLGN?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Gross margin of 16.8% reflects its high production costs
- Poor free cash flow margin of 1.5% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $39.74 per share, Silgan Holdings trades at 10.2x forward P/E. To fully understand why you should be careful with SLGN, check out our full research report (it’s free for active Edge members).
Exponent (EXPO)
Market Cap: $3.52 billion
With a team of over 800 consultants holding advanced degrees in 90+ technical disciplines, Exponent (NASDAQ:EXPO) is a science and engineering consulting firm that investigates complex problems and provides expert analysis for clients across various industries.
Why Does EXPO Fall Short?
- 3.5% annual revenue growth over the last two years was slower than its business services peers
- Annual earnings per share growth of 1.8% underperformed its revenue over the last two years, showing its incremental sales were less profitable
- Eroding returns on capital suggest its historical profit centers are aging
Exponent’s stock price of $70.66 implies a valuation ratio of 31.3x forward P/E. If you’re considering EXPO for your portfolio, see our FREE research report to learn more.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 6 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-micro-cap company Kadant (+351% 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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