2 Russell 2000 Companies Showing Promising Growth and 1 Encountering Challenges

Russell 2000: Where to Find the Next Big Movers

The Russell 2000 index is a treasure trove for investors seeking emerging companies with significant growth prospects. While these smaller firms can deliver impressive gains, they often lack the stability and financial strength of their larger counterparts. As a result, careful analysis is essential when picking potential winners in this space.

Given the challenges of investing in small-cap stocks, we created StockStory to help you identify the standouts and avoid those likely to underperform. Below, we highlight two Russell 2000 stocks with breakout potential and one that may face headwinds.

Stock to Approach with Caution

Jackson Financial (JXN)

Market Capitalization: $7.83 billion

Jackson Financial (NYSE:JXN), which became independent from Prudential plc in 2021 after decades as its U.S. arm, provides annuities and retirement planning products to help Americans secure their financial futures.

Reasons for Concern with JXN:

• Net premiums have only grown by 1.9% per year over the past two years, which falls short of industry expectations.
• Operating costs have risen as a share of revenue, and the company’s pre-tax profit margin has dropped by 32.8 percentage points during the same period.
• Earnings per share have declined at an annual rate of 2.3% over the last four years—a worrying trend since long-term stock performance often tracks EPS growth.

Currently, Jackson Financial trades at $111.61 per share, representing 0.7 times its projected book value.

Two Promising Russell 2000 Stocks

Vita Coco (COCO)

Market Capitalization: $3.15 billion

Launched in 2004 and listed publicly in 2021, The Vita Coco Company (NASDAQ:COCO) is known for its coconut water beverages, offering consumers a natural way to stay hydrated.

What Makes COCO Stand Out?

• Unit sales have surged by 9.9% annually over the past two years, reflecting robust demand for its products.
• Earnings per share have soared by 70.9% each year for the last three years, outperforming industry peers.
• A leading 36.9% return on capital highlights management’s ability to find and capitalize on high-return opportunities, with returns continuing to improve as the company grows.

Vita Coco is currently priced at $53.25 per share, or 33.3 times its forward earnings. Considering an investment?

Cadre (CDRE)

Market Capitalization: $1.74 billion

Formerly known as Safariland, Cadre (NYSE:CDRE) manufactures and distributes safety and survival equipment designed for first responders.

Why Is CDRE Compelling?

• Revenue has climbed by 13.4% annually over the past two years, suggesting the company is gaining market share.
• Sales are projected to grow by 16.1% in the next year, accelerating from its recent growth trend.
• Earnings per share have compounded at 19.9% per year over the past two years, far outpacing competitors.

Cadre’s share price of $42.17 equates to a forward price-to-earnings ratio of 28.5. Thinking about adding CDRE to your portfolio?

Top-Quality Stocks for Every Market Environment

This year’s market rally has been driven by just four stocks, which together account for half of the S&P 500’s total gains. Such a narrow advance can make investors uneasy. While many chase the same popular names, savvy investors are searching for quality companies that are still under the radar—and often available at more reasonable valuations. Discover our picks in the Top 5 Strong Momentum Stocks for this week, a curated list of high-quality stocks that have delivered a remarkable 244% return over the past five years (as of June 30, 2025).

Our 2020 selections included now-household names like Nvidia, which soared 1,326% from June 2020 to June 2025, as well as lesser-known companies such as Comfort Systems, which achieved a 782% five-year return. Start your search for the next standout performer with StockStory today.