Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings.
However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
Financial services company Pathward Financial (NASDAQ:CASH) reported Q1 CY2025 results topping the market’s revenue expectations, with sales up 7.8% year on year to $266.6 million. Its non-GAAP profit of $3.41 per share was 22.5% above analysts’ consensus estimates.
A cash-heavy balance sheet is often a sign of strength, but not always.
Some companies avoid debt because they have weak business models, limited expansion opportunities, or inconsistent cash flow.
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.
Companies Reporting Before The Bell • Freeport-McMoRan (NYSE:FCX) is estimated to report quarterly earnings at $0.22 per share on revenue of $5.86 billion.
