Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names. But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses.
Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. Keeping that in mind, here is one Russell 2000 stock that could deliver strong gains and two that may face some trouble.
Two Stocks to Sell:
ThredUp (TDUP)
Market Cap: $799.7 million
Founded to revolutionize thrifting, ThredUp (NASDAQ: TDUP) is a leading online fashion resale marketplace offering a wide selection of gently-used clothing and accessories.
Why Do We Steer Clear of TDUP?
- Demand for its offerings was relatively low as its number of orders has underwhelmed
- Suboptimal cost structure is highlighted by its history of operating margin losses
- Cash burn makes us question whether it can achieve sustainable long-term growth
At $6.47 per share, ThredUp trades at 49.1x forward EV-to-EBITDA. If you’re considering TDUP for your portfolio, see our FREE research report to learn more.
Donnelley Financial Solutions (DFIN)
Market Cap: $1.24 billion
Born from the need to navigate increasingly complex financial regulations in the digital age, Donnelley Financial Solutions (NYSE: DFIN) provides software and technology-enabled services that help companies comply with SEC regulations and manage financial transactions and reporting requirements.
Why Does DFIN Give Us Pause?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3% annually over the last five years
Donnelley Financial Solutions is trading at $46.69 per share, or 11x forward P/E. Dive into our free research report to see why there are better opportunities than DFIN.
One Stock to Buy:
CBIZ (CBZ)
Market Cap: $2.70 billion
With over 120 offices across 33 states and a team of more than 6,700 professionals, CBIZ (NYSE: CBZ) provides accounting, tax, benefits, insurance brokerage, and advisory services to help small and mid-sized businesses manage their finances and operations.
Why Are We Backing CBZ?
- Annual revenue growth of 31% over the last two years was superb and indicates its market share increased during this cycle
- Projected revenue growth of 10% for the next 12 months suggests its momentum from the last two years will persist
- Earnings per share grew by 28.3% annually over the last two years, massively outpacing its peers
CBIZ’s stock price of $50.45 implies a valuation ratio of 12.9x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
