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.
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. That said, here are two small-cap stocks that could be the next 100 baggers and one best left ignored.
One Small-Cap Stock to Sell:
Dave & Buster's (PLAY)
Market Cap: $458.6 million
Founded by a former game parlor and bar operator, Dave & Buster’s (NASDAQ: PLAY) operates a chain of arcades providing immersive entertainment experiences.
Why Do We Steer Clear of PLAY?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Dave & Buster's is trading at $13.45 per share, or 11.4x forward P/E. Read our free research report to see why you should think twice about including PLAY in your portfolio.
Two Small-Cap Stocks to Watch:
QCR Holdings (QCRH)
Market Cap: $1.28 billion
With roots dating back to 1993 and a name reflecting its original Quad Cities market, QCR Holdings (NASDAQGM:QCRH) operates four community banks across Iowa and Missouri, providing commercial, consumer banking, and trust services to businesses and individuals.
Why Is QCRH a Top Pick?
- Productivity and efficiency ratio profits are expected to increase next year as some fixed cost leverage kicks in
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 14.6% over the last five years outstripped its revenue performance
- Annual tangible book value per share growth of 12.6% over the past five years was outstanding, reflecting strong capital accumulation this cycle
QCR Holdings’s stock price of $76.28 implies a valuation ratio of 1.1x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Frost Bank (CFR)
Market Cap: $7.91 billion
Tracing its roots back to 1868 when it was founded during Texas's post-Civil War reconstruction era, Cullen/Frost Bankers (NYSE: CFR) operates Frost Bank, a Texas-based financial institution providing commercial and consumer banking, wealth management, and insurance services.
Why Should CFR Be on Your Watchlist?
- Impressive 12.6% annual net interest income growth over the last five years indicates it’s winning market share this cycle
- Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 11% outpaced its revenue gains
- Annual tangible book value per share growth of 23.2% over the last two years was superb and indicates its capital strength increased during this cycle
At $123.74 per share, Frost Bank trades at 1.8x forward P/B. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% 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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