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.
Picking the right small caps isn’t easy, and that’s exactly why StockStory exists - to help you focus on the best opportunities. That said, here are three Russell 2000 stocks that don’t make the cut and some better choices instead.
Torrid (CURV)
Market Cap: $114 million
Promoting a message of body positivity and inclusiveness, Torrid Holdings (NYSE: CURV) is a plus-size women’s apparel and accessories retailer.
Why Do We Think CURV Will Underperform?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Earnings per share have dipped by 63% annually over the past three years, which is concerning because stock prices follow EPS over the long term
- ROIC of 2.2% reflects management’s challenges in identifying attractive investment opportunities
Torrid’s stock price of $1.20 implies a valuation ratio of 20.7x forward P/E. To fully understand why you should be careful with CURV, check out our full research report (it’s free for active Edge members).
Bark (BARK)
Market Cap: $113.4 million
Making a name for itself with the BarkBox, Bark (NYSE: BARK) specializes in subscription-based, personalized pet products.
Why Do We Avoid BARK?
- Sales tumbled by 5.3% annually over the last two years, showing consumer trends are working against its favor
- Negative free cash flow raises questions about the return timeline for its investments
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
At $0.66 per share, Bark trades at 26.9x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why BARK doesn’t pass our bar.
Fulton Financial (FULT)
Market Cap: $3.12 billion
Tracing its roots back to 1882 in the heart of Pennsylvania, Fulton Financial (NASDAQ: FULT) is a financial holding company that provides banking, lending, and wealth management services to consumers and businesses across five Mid-Atlantic states.
Why Are We Cautious About FULT?
- Estimated net interest income growth of 3.3% for the next 12 months implies demand will slow from its five-year trend
- Weak unit economics are reflected in its net interest margin of 3.5%, one of the worst among bank companies
- Efficiency ratio is expected to worsen by 2.7 percentage points over the next year
Fulton Financial is trading at $17.27 per share, or 1x forward P/B. Dive into our free research report to see why there are better opportunities than FULT.
Stocks We Like More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
