StockStory Flags Valuation Risks in Small-Cap Trio ERII, ITRI, GTES

On June 2, 2026, research platform StockStory advised caution on three small-cap stocks, warning their current valuations may not adequately reflect risks. The flagged companies are Energy Recovery (NASDAQ:ERII), Itron (NASDAQ:ITRI), and Gates Industrial (NYSE:GTES). Energy Recovery, which makes energy recovery devices, traded at $8.05 per share, giving it a $412.4 million market cap and a forward price-to-earnings ratio of 77.8. Itron, a provider of utility meter solutions, had a stock price of $83.08 and a $3.76 billion market cap, translating to a 13.9 forward P/E. Gates Industrial, producing power transmission equipment, traded at $25.80, or 1.8 times forward sales, with a $6.56 billion market cap. StockStory noted that limited Wall Street attention on small caps can create opportunities but also heightens downside risk, as these firms may lack the scale to weather downturns. The firm advised investors to consider alternatives.