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.
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 three small-cap stocks to avoid and some other investments you should consider instead.
Getty Images (GETY)
Market Cap: $112.1 million
With a vast library of over 562 million visual assets documenting everything from breaking news to iconic historical moments, Getty Images (NYSE:GETY) is a global visual content marketplace that licenses photos, videos, illustrations, and music to businesses, media outlets, and creative professionals.
Why Do We Steer Clear of GETY?
- Sales trends were unexciting over the last five years as its 2.8% annual growth was below the typical business services company
- Free cash flow margin dropped by 22.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Getty Images is trading at $0.28 per share, or 0.1x forward price-to-sales. If you’re considering GETY for your portfolio, see our FREE research report to learn more.
fuboTV (FUBO)
Market Cap: $330.7 million
Originally launched as a soccer streaming platform, fuboTV (NYSE:FUBO) is a video streaming service specializing in live sports, news, and entertainment content.
Why Is FUBO Not Exciting?
- Footprint is expanding as its domestic subscribers have grown at a decent pace
- Historical operating margin losses point to an inefficient cost structure
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
At $10.32 per share, fuboTV trades at 42.1x forward P/E. Dive into our free research report to see why there are better opportunities than FUBO.
FTI Consulting (FCN)
Market Cap: $4.10 billion
With a team of experts deployed across 30+ countries to tackle complex business challenges, FTI Consulting (NYSE:FCN) is a global business advisory firm that helps organizations manage change, mitigate risk, and resolve disputes across financial, legal, operational, and regulatory matters.
Why Does FCN Fall Short?
- Annual revenue growth of 3% over the last two years was below our standards for the business services sector
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Waning returns on capital imply its previous profit engines are losing steam
FTI Consulting’s stock price of $151.58 implies a valuation ratio of 14.6x forward P/E. Read our free research report to see why you should think twice about including FCN in your portfolio.
High-Quality Stocks for All Market Conditions
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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.