1 Russell 2000 Stock Worth Your Attention and 2 That Underwhelm

1 Russell 2000 Stock Worth Your Attention and 2 That Underwhelm

The Russell 2000 (^RUT) is packed with potential breakout stocks, thanks to its focus on smaller companies with high growth potential. However, smaller size also means these businesses often lack the resilience and financial flexibility of large-cap firms, making careful selection crucial.

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 is one Russell 2000 stock that could deliver strong gains and two best left off your watchlist.

Two Stocks to Sell:

Figs (FIGS)

Market Cap: $1.88 billion

Rising to fame via TikTok and founded in 2013 by Heather Hasson and Trina Spear, Figs (NYSE:FIGS) is a healthcare apparel company known for its stylish approach to medical attire and uniforms.

Why Do We Think FIGS Will Underperform?

Number of active customers has disappointed over the past two years, indicating weak demand for its offerings Earnings per share have dipped by 5% annually over the past four years, which is concerning because stock prices follow EPS over the long term Low free cash flow margin of 8.2% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders

At $11.35 per share, Figs trades at 39.5x forward P/E. Read our free research report to see why you should think twice about including FIGS in your portfolio, it's free.

Fortrea (FTRE)

Market Cap: $1.60 billion

Spun off from Labcorp in 2023 to focus exclusively on clinical research services, Fortrea (NASDAQ:FTRE) is a contract research organization that helps pharmaceutical, biotech, and medical device companies develop and bring their products to market through clinical trials and support services.

Why Do We Avoid FTRE?

Products and services are facing significant end-market challenges during this cycle as sales have declined by 3.1% annually over the last four years Negative returns on capital show that some of its growth strategies have backfired, and its shrinking returns suggest its past profit sources are losing steam Waning returns on capital from an already weak starting point displays the inefficacy of management's past and current investment decisions

Fortrea's stock price of $17.66 implies a valuation ratio of 21.4x forward P/E. Check out our free in-depth research report to learn more about why FTRE doesn't pass our bar.

One Stock to Watch:

Tutor Perini (TPC)

Market Cap: $3.87 billion

Known for constructing the Philadelphia Eagles' Stadium, Tutor Perini (NYSE:TPC) is a civil and building construction company offering diversified general contracting and design-build services.

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Why Does TPC Stand Out?

Impressive 17% annual revenue growth over the last two years indicates it's winning market share this cycle Earnings growth has trumped its peers over the last two years as its EPS has compounded at 102% annually Free cash flow margin increased by 12.9 percentage points over the last five years, giving the company more capital to invest or return to shareholders

Tutor Perini is trading at $79.28 per share, or 15.1x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it's free.

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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.

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