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. That said, here is one small-cap stock that could be the next 100 bagger and two that could be down big.

Market Cap: $1.21 billion

Founded as a small leather goods business, G-III (NASDAQ:GIII) is a fashion and apparel conglomerate with a diverse portfolio of brands.

Why Do We Steer Clear of GIII?

Lackluster 5.8% annual revenue growth over the last five years indicates the company is losing ground to competitors

Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

Unchanged returns on capital make it difficult for the company’s valuation multiple to re-rate

At $28.70 per share, G-III trades at 11x forward P/E. Check out our free in-depth research report to learn more about why GIII doesn’t pass our bar.

Market Cap: $312.6 million

Founded as a chain of daily newspapers, E.W. Scripps (NASDAQ:SSP) is a diversified media enterprise operating a range of local television stations, national networks, and digital media platforms.

Why Is SSP Risky?

Muted 6.5% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers

Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

High net-debt-to-EBITDA ratio of 5× could force the company to raise capital at unfavorable terms if market conditions deteriorate

E.W. Scripps’s stock price of $3.49 implies a valuation ratio of 7.7x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including SSP in your portfolio, it’s free.

Market Cap: $9.65 billion

Founded in 1874, Watts Water (NYSE:WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally.

Why Is WTS a Top Pick?

Solid 9.3% annual revenue growth over the last five years indicates its offering’s solve complex business issues

Offerings are mission-critical for businesses and result in a best-in-class gross margin of 45.9%

Share repurchases have amplified shareholder returns as its annual earnings per share growth of 21.8% exceeded its revenue gains over the last five years

Watts Water Technologies is trading at $289.28 per share, or 26.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Check out the high-quality names we’ve flagged 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.