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.
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 three small-cap stocks to swipe left on and some alternatives you should look into instead.
Revolve (RVLV)
Market Cap: $2.09 billion
Launched in 2003 by software engineers Michael Mente and Mike Karanikolas, Revolve (NASDAQ:RVLV) is a fashion retailer leveraging social media and a community of fashion influencers to drive its merchandising strategy.
Why Should You Dump RVLV?
- Modest 5.7% annual growth in active customers over the last two years indicates potential challenges in customer acquisition and retention
- Demand has been weak recently as it posted disappointing growth in its average revenue per buyer and struggled to expand its platform
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
Revolve is trading at $29.09 per share, or 20.8x forward EV/EBITDA. Check out our free in-depth research report to learn more about why RVLV doesn’t pass our bar.
Albany (AIN)
Market Cap: $1.65 billion
Founded in 1895, Albany (NYSE:AIN) is a global textiles and materials processing company, specializing in machine clothing for paper mills and engineered composite structures for aerospace and other industries.
Why Do We Avoid AIN?
- Sales trends were unexciting over the last two years as its 2.5% annual growth was below the typical industrials company
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 9.9 percentage points
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $57.44 per share, Albany trades at 20.9x forward P/E. Dive into our free research report to see why there are better opportunities than AIN.
BankUnited (BKU)
Market Cap: $3.53 billion
Born from the ashes of a failed Florida thrift during the 2009 financial crisis, BankUnited (NYSE:BKU) is a regional bank that provides commercial lending, deposit services, and treasury solutions to businesses and consumers primarily in Florida and the New York metropolitan area.
Why Are We Wary of BKU?
- Annual net interest income growth of 5.6% over the last five years was below our standards for the banking sector
- Efficiency ratio is expected to worsen by 15.3 percentage points over the next year
- Earnings per share lagged its peers over the last five years as they only grew by 4.9% annually
BankUnited’s stock price of $47.49 implies a valuation ratio of 1.1x forward P/B. If you’re considering BKU for your portfolio, see our FREE research report to learn more.
Stocks We Like 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 Growth Stocks for this month. 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.