3 Russell 2000 Stocks with Open Questions

3 Russell 2000 Stocks with Open Questions

Radek Strnad

Thu, February 26, 2026 at 10:08 PM GMT+9 3 min read

In this article:

APLD

-5.15%

PBI

+0.28%

WK

+2.44%

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.

Workiva (WK)

Market Cap: $3.36 billion

Nicknamed “the Excel killer” by some finance professionals for its ability to eliminate spreadsheet chaos, Workiva (NYSE:WK) provides a cloud-based platform that enables organizations to streamline financial reporting, ESG, and compliance processes with connected data and automation.

Why Does WK Worry Us?

Operating margin expanded by 5.6 percentage points over the last year as it scaled and became more efficient

Workiva’s stock price of $57.76 implies a valuation ratio of 3.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than WK.

Pitney Bowes (PBI)

Market Cap: $1.60 billion

With a century-long history dating back to 1920 and processing over 15 billion pieces of mail annually, Pitney Bowes (NYSE:PBI) provides shipping, mailing technology, logistics, and financial services to businesses of all sizes.

Why Are We Cautious About PBI?

Products and services are facing significant end-market challenges during this cycle as sales have declined by 11.8% annually over the last five years

Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment

Pitney Bowes is trading at $10.67 per share, or 7.3x forward P/E. To fully understand why you should be careful with PBI, check out our full research report (it’s free).

Applied Digital (APLD)

Market Cap: $8.13 billion

Pivoting from its origins in cryptocurrency mining to become a key player in the AI infrastructure boom, Applied Digital (NASDAQ:APLD) designs and operates specialized data centers that provide high-performance computing infrastructure for artificial intelligence and blockchain applications.

Why Is APLD Not Exciting?

Flat earnings per share over the last three years underperformed the sector average

Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 79.8 percentage points

Short cash runway increases the probability of a capital raise that dilutes existing shareholders

 






Story Continues  

At $29.53 per share, Applied Digital trades at 71x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including APLD in your portfolio, it’s free.

High-Quality Stocks for All Market Conditions

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