3 Small-Cap Stocks Facing Headwinds

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.

Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are three small-cap stocks to avoid and some other investments you should consider instead.

Avantor (AVTR)

Market Cap: $9.36 billion

With roots dating back to 1904 and embedded in virtually every stage of scientific research and production, Avantor (NYSE:AVTR) provides mission-critical products, materials, and services to customers in biopharma, healthcare, education, and advanced technology industries.

Why Is AVTR Not Exciting?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy

2. Demand will likely be weak over the next 12 months as Wall Street expects flat revenue

3. Inability to adjust its cost structure while its revenue declined over the last two years led to a 3 percentage point drop in the company’s adjusted operating margin

Avantor’s stock price of $13.74 implies a valuation ratio of 12.5x forward P/E. If you’re considering AVTR for your portfolio, see our FREE research report to learn more.

NBT Bancorp (NBTB)

Market Cap: $1.97 billion

Tracing its roots back to 1856 when it first opened its doors in Norwich, New York, NBT Bancorp (NASDAQ:NBTB) is a community-oriented financial institution providing banking, wealth management, and insurance services to individuals and businesses across the northeastern United States.

Why Does NBTB Worry Us?

1. 6.7% annual net interest income growth over the last four years was slower than its bank peers

2. Performance over the past five years shows its incremental sales were less profitable, as its 1% annual earnings per share growth trailed its revenue gains

3. Muted 7.2% annual tangible book value per share growth over the last two years shows its capital generation lagged behind its bank peers

NBT Bancorp is trading at $41.72 per share, or 1.2x forward P/B. Check out our free in-depth research report to learn more about why NBTB doesn’t pass our bar.

First Financial Bancorp (FFBC)

Market Cap: $2.35 billion

Tracing its roots back to 1863 during the Civil War era, First Financial Bancorp (NASDAQ:FFBC) is a bank holding company that provides commercial banking, lending, deposit services, and wealth management to individuals and businesses.

Why Are We Cautious About FFBC?

1. Muted 4% annual revenue growth over the last two years shows its demand lagged behind its bank peers

2. Estimated net interest income growth of 1.2% for the next 12 months implies demand will slow from its four-year trend

3. 4.7% annual tangible book value per share growth over the last five years was slower than its bank peers

At $24.55 per share, First Financial Bancorp trades at 0.9x forward P/B. Read our free research report to see why you should think twice about including FFBC in your portfolio, it’s free.

Stocks We Like More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% 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