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.
By breaking down physical barriers, consumer internet businesses are reshaping how people shop, connect, learn, and play. But it’s not all sunshine and rainbows as consumer purchasing power can make or break demand.
This unpredictability is weighing on returns as the industry has posted a flat return over the past six months while the S&P 500 was up 10.6%.
Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.
Just because a business is in the green today doesn’t mean it will thrive tomorrow.
The stocks featured in this article have all approached their 52-week highs.
When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.
The $10-50 price range often includes mid-sized businesses with proven track records and plenty of growth runway ahead.
They also usually carry less risk than penny stocks, though they’re not immune to volatility as many lack the scale advantages of their larger peers.
The Russell 2000 (^RUT) is home to many small-cap stocks, offering investors the chance to uncover hidden gems before the broader market catches on.
However, these companies often come with higher volatility and risk, as their smaller size makes them more vulnerable to economic downturns.
Phoenix, AZ – December 10, 2025 – In a remarkable testament to corporate resilience and strategic execution, Carvana Co. (NYSE: CVNA) has achieved its longest winning run on record, culminating in its much-anticipated inclusion in the prestigious S&P 500 index. This dramatic turnaround, from the brink of bankruptcy just two years
Shares of online auto marketplace CarGurus (NASDAQ:CARG) jumped 4.6% in the afternoon session after the company launched PriceVantage, an AI-powered pricing tool for used vehicles. The solution used real-time consumer demand data from the company's automotive shopping platform to provide predictive pricing guidance. The goal was to give dealers a competitive edge by helping them sell cars faster and increase their profits. According to the announcement, dealers who used the PriceVantage recommendations saw a 71% average increase in daily shopper connections. Furthermore, the most engaged dealers achieved sale times that were five times faster than their main competitors on the CarGurus platform.
Cargurus (CARG) aligns with Peter Lynch's GARP strategy, showing sustainable growth, zero debt, high profitability, and an attractive PEG ratio for long-term investors.
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how CarGurus (NASDAQ:CARG) and the rest of the online marketplace stocks fared in Q3.
ArrowMark’s sharp reduction in its Alight stake comes at a moment when the market is questioning whether the company can turn its consulting-heavy work into steadier recurring revenue, and that tension may say more about sentiment than about the strength of the platform itself.
CarGurus (CARG) presents a classic value investing case: a financially strong, profitable company with zero debt, trading at a discount to its industry and the market.
CarGurus trades at $36 per share and has stayed right on track with the overall market, gaining 12.5% over the last six months. At the same time, the S&P 500 has returned 14.4%.
Volatility cuts both ways - while it creates opportunities, it also increases risk, making sharp declines just as likely as big gains.
This unpredictability can shake out even the most experienced investors.
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.
