3 Russell 2000 Stocks with Open Questions

Barchart·03/02/2026 04:44:17

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.

Picking the right small caps isn’t easy, and that’s exactly why StockStory exists - to help you focus on the best opportunities. That said, here are three Russell 2000 stocks that don’t make the cut and some better choices instead.

Bark (BARK)

Market Cap: $135 million

Making a name for itself with the BarkBox, Bark (NYSE:BARK) specializes in subscription-based, personalized pet products.

Why Should You Sell BARK?

1. Lackluster 5.2% annual revenue growth over the last five years indicates the company is losing ground to competitors
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

At $0.78 per share, Bark trades at 39.8x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why BARK doesn’t pass our bar.

Select Medical (SEM)

Market Cap: $1.86 billion

With a nationwide network spanning 46 states and over 2,700 healthcare facilities, Select Medical (NYSE:SEM) operates critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers across the United States.

Why Does SEM Worry Us?

1. Declining admissions over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
2. Earnings per share fell by 9.3% annually over the last five years while its revenue was flat, showing each sale was less profitable
3. High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens

Select Medical is trading at $14.96 per share, or 12x forward P/E. Read our free research report to see why you should think twice about including SEM in your portfolio.

Washington Trust Bancorp (WASH)

Market Cap: $641.5 million

Founded in 1800 and operating as Rhode Island's oldest community bank, Washington Trust Bancorp (NASDAQ:WASH) is a regional bank holding company offering commercial banking, mortgage lending, personal banking, and wealth management services.

Why Should You Dump WASH?

1. 3.7% annual net interest income growth over the last five years was slower than its banking peers
2. Net interest margin of 2.2% reflects its high servicing and capital costs
3. Sales over the last five years were less profitable as its earnings per share fell by 7.8% annually while its revenue was flat

Washington Trust Bancorp’s stock price of $33.67 implies a valuation ratio of 1.2x forward P/B. Dive into our free research report to see why there are better opportunities than WASH.

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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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.

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