3 Russell 2000 Stocks with Open Questions

3 Russell 2000 Stocks with Open Questions

Petr Huřťák

Tue, February 24, 2026 at 1:38 PM GMT+9 3 min read

In this article:

FUBO

-4.84%

FLWS

-1.52%

DNOW

-10.43%

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.

Picking the right small caps isn’t easy, and that’s exactly why StockStory exists - to help you focus on the best opportunities. Keeping that in mind, here are three Russell 2000 stocks to steer clear of and some alternatives to watch instead.

fuboTV (FUBO)

Market Cap: $416.2 million

Originally launched as a soccer streaming platform, fuboTV (NYSE:FUBO) is a video streaming service specializing in live sports, news, and entertainment content.

Why Are We Out on FUBO?

Sluggish trends in its domestic subscribers suggest customers aren’t adopting its solutions as quickly as the company hoped

Poor expense management has led to operating margin losses

Cash-burning tendencies make us wonder if it can sustainably generate shareholder value

fuboTV’s stock price of $1.20 implies a valuation ratio of 1.4x forward EV-to-EBITDA. If you’re considering FUBO for your portfolio, see our FREE research report to learn more.

1-800-FLOWERS (FLWS)

Market Cap: $206.9 million

Founded in 1976, 1-800-FLOWERS (NASDAQ:FLWS) is an online retailer of flowers, gifts, and gourmet foods, serving customers globally.

Why Do We Avoid FLWS?

Products and services aren't resonating with the market as its revenue declined by 3.1% annually over the last five years

Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

High net-debt-to-EBITDA ratio of 11× increases the risk of forced asset sales or dilutive financing if operational performance weakens

At $3.28 per share, 1-800-FLOWERS trades at 0.1x forward price-to-sales. Read our free research report to see why you should think twice about including FLWS in your portfolio, it’s free.

DNOW (DNOW)

Market Cap: $2.21 billion

Spun off from National Oilwell Varco, DNOW (NYSE:DNOW) provides distribution and supply chain solutions for the energy and industrial end markets.

Why Are We Hesitant About DNOW?

Operating margin of 2.8% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments

Revenue growth over the past two years was nullified by the company’s new share issuances as its earnings per share fell by 3.7% annually

Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

 






Story Continues  

DNOW is trading at $11.87 per share, or 18.1x forward P/E. To fully understand why you should be careful with DNOW, check out our full research report (it’s free).

High-Quality Stocks for All Market Conditions

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

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