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.
Banks use their capital and expertise to help businesses grow while offering consumers essential financial products like mortgages and credit cards. But concerns about loan losses and tightening regulations have tempered enthusiasm,
capping the upside for banking stocks lately - over the past six months, the industry’s flat return has trailed the S&P 500’s 5.2% gain.
A company that generates cash isn’t automatically a winner.
Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Mortgage REIT Dynex Capital (NYSE:DX) fell short of the market’s revenue expectations in Q1 CY2025, but sales rose 637% year on year to $17.13 million. Its non-GAAP profit of $0.21 per share was 43.7% below analysts’ consensus estimates.
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.
Wall Street’s bearish price targets for the stocks in this article signal serious concerns.
Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Dynex Capital (NYSE:DX) and the rest of the thrifts & mortgage finance stocks fared in Q1.
Dynex Capital shares are trading lower by 4.1% during Thursday's session. The company announced it has priced an underwritten public offering of 10.5 million shares of common stock.
Companies Reporting Before The Bell • MainStreet Bancshares (NASDAQ:MNSB) is projected to report quarterly earnings at $0.52 per share on revenue of $17.10 million.
Companies Reporting Before The Bell • Koninklijke Philips (NYSE:PHG) is expected to report quarterly earnings at $0.63 per share on revenue of $5.79 billion.
