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.
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.
Online legal service provider LegalZoom (NASDAQ:LZ) reported Q1 CY2025 results topping the market’s revenue expectations, with sales up 5.1% year on year to $183.1 million. The company expects next quarter’s revenue to be around $183 million, close to analysts’ estimates. Its non-GAAP profit of $0.13 per share was in line with analysts’ consensus estimates.
When Wall Street turns bearish on a stock, it’s worth paying attention.
These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as M&A advisory.
Investors can certainly boost their returns by concentrating on stocks trading between $1 and $10.
However, a disciplined approach is necessary because many of these businesses are speculative and lack the underlying fundamentals to support their prices.
Whether it be online shopping or social media, secular forces are propelling consumer internet businesses forward. But it’s not all sunshine and rainbows as consumer purchasing power can make or break demand.
Unfortunately, the market seems to believe stormy skies are ahead as the industry has shed 2.2% over the past six months. This drop was almost identical to the S&P 500’s decline.
A company with profits isn’t always a great investment.
Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.
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.
Shares of online legal service provider LegalZoom (NASDAQ:LZ) jumped 27.1% in the afternoon session after the company reported strong first quarter 2025 results which beat analysts' revenue, EPS, and EBITDA expectations, and also saw subscription units outperform Wall Street's estimates. Transaction revenue, by contrast, was flat, held back by a drop in business formations and softer average order values. Overall, we think this was a solid quarter with some key metrics above expectations.
Let's delve into the US markets on Thursday and uncover the stocks that are experiencing notable gaps in today's session. Below, you'll find the gap up and gap down stocks.
Online legal service provider LegalZoom (NASDAQ:LZ) reported Q1 CY2025 results exceeding the market’s revenue expectations, with sales up 5.1% year on year to $183.1 million. The company expects next quarter’s revenue to be around $183 million, close to analysts’ estimates. Its GAAP profit of $0.03 per share was $0.02 above analysts’ consensus estimates.
Value investing has created more billionaires than any other strategy, like Warren Buffett, who built his fortune by purchasing wonderful businesses at reasonable prices.
But these hidden gems are few and far between - many stocks that appear cheap often stay that way because they face structural issues.
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how online marketplace stocks fared in Q4, starting with LegalZoom (NASDAQ:LZ).
LegalZoom currently trades at $6.64 per share and has shown little upside over the past six months, posting a middling return of 2.2%. However, the stock is beating the S&P 500’s 14.2% decline during that period.
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how online marketplace stocks fared in Q4, starting with Etsy (NASDAQ:ETSY).
