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.

The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here is one small-cap stock that could be the next big thing and two best left ignored.

Two Small-Cap Stocks to Sell:

REV Group (REVG)

Market Cap: $1.49 billion

Offering the first full-electric North American fire truck, REV (NYSE:REVG) manufactures and sells specialty vehicles.

Why Is REVG Not Exciting?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years

2. Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 11.7%

3. Poor expense management has led to an operating margin of 2.5% that is below the industry average

REV Group is trading at $30.72 per share, or 11.5x forward price-to-earnings. If you’re considering REVG for your portfolio, see our FREE research report to learn more .

Stratasys (SSYS)

Market Cap: $651.8 million

Born from the Founder’s idea of making a toy frog with a glue gun, Stratasys (NASDAQ:SSYS) offers 3D printers and related materials, software, and services to many industries.

Why Are We Out on SSYS?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.1% annually over the last five years

2. Performance over the past five years was negatively impacted by new share issuances as its earnings per share dropped by 34% annually, worse than its revenue

3. Cash-burning history makes us doubt the long-term viability of its business model

Stratasys’s stock price of $9.20 implies a valuation ratio of 25.9x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than SSYS .

One Small-Cap Stock to Buy:

QuinStreet (QNST)

Market Cap: $864 million

Founded during the dot-com era in 1999 and specializing in high-intent consumer traffic, QuinStreet (NASDAQ:QNST) operates digital performance marketplaces that connect clients in financial and home services with consumers actively searching for their products.

Why Is QNST a Good Business?

1. Annual revenue growth of 27.1% over the last two years was superb and indicates its market share increased during this cycle

2. Notable projected revenue growth of 21% for the next 12 months hints at market share gains

3. Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 99.4% annually