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.
Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. That said, here are three Russell 2000 stocks that don’t make the cut and some better choices instead.
Agilysys (AGYS)
Market Cap: $2.95 billion
With a tech stack that powers everything from check-in to checkout at some of the world's top hospitality venues, Agilysys (NASDAQ: AGYS) develops and provides cloud-based and on-premise software solutions for hotels, resorts, casinos, and restaurants to manage operations and enhance guest experiences.
Why Does AGYS Worry Us?
- Annual revenue growth of 19% over the last three years was below our standards for the software sector
- Gross margin of 62.1% reflects its relatively high servicing costs
Agilysys’s stock price of $105.49 implies a valuation ratio of 9.3x forward price-to-sales. Check out our free in-depth research report to learn more about why AGYS doesn’t pass our bar.
Pursuit (PRSU)
Market Cap: $1.04 billion
With attractions ranging from glacier tours in the Canadian Rockies to an oceanfront geothermal lagoon in Iceland, Pursuit Attractions and Hospitality (NYSE: PRSU) operates iconic travel experiences, experiential marketing services, and exhibition management across North America and Europe.
Why Are We Hesitant About PRSU?
- Sales tumbled by 16.4% annually over the last five years, showing consumer trends are working against its favor
- Poor free cash flow margin of 1.4% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Negative returns on capital show management lost money while trying to expand the business
Pursuit trades at a stock price of $36.65. Dive into our free research report to see why there are better opportunities than PRSU.
Atlantic Union Bankshares (AUB)
Market Cap: $5.05 billion
Tracing its roots back to 1902 when it first opened its doors in Virginia, Atlantic Union Bankshares (NYSE: AUB) is a full-service regional bank providing commercial and retail banking, wealth management, and insurance services throughout Virginia and parts of Maryland and North Carolina.
Why Is AUB Not Exciting?
- Net interest margin of 3.4% is well below other banks, signaling its loans aren’t very profitable
- Tangible book value per share stagnated over the last five years, limiting its ability to leverage its balance sheet to make additional investments
- Projected tangible book value per share growth of 6.5% for the next 12 months suggests sluggish capital generation
At $35.42 per share, Atlantic Union Bankshares trades at 1x forward P/B. Read our free research report to see why you should think twice about including AUB in your portfolio.
High-Quality Stocks for All Market Conditions
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Take advantage of the rebound by checking 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 183% over the last five years (as of March 31st 2025).
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