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Decoding Micro-Cap Value with P/S Ratios

  • 1.  Decoding Micro-Cap Value with P/S Ratios

    Posted 09-10-2025 13:21

    The Tiny Titans stock screen, based on James O'Shaughnessy's research, seeks out micro-cap stocks ($25–$250 million in market cap) that are both cheap and on the move. One of its key rules is a price-to-sales (P/S) ratio below 1, which aims to identify companies trading at a discount to their revenue. From there, the screen looks for the 25 stocks with the strongest 52-week relative strength.

    The appeal is clear: many micro-caps are overlooked by Wall Street, so this combination of value and momentum can uncover hidden gems. But a low P/S ratio can also be a red flag, sometimes signaling distressed businesses with poor fundamentals rather than true bargains.

    👉 Check out the Tiny Titans screen here to see which stocks qualify today.

    Question for discussion:

    Do you see P/S as the best metric for spotting undervalued micro-caps, or would you prefer another measure like P/E or EV/EBITDA? And how do you filter out companies with low P/S ratios that are cheap for a reason?

    Tiny Titans Screening Criteria:

    • Companies not based in the United States are excluded
    • Companies must be listed on the New York or NASDAQ exchange
    • Market capitalization for the latest fiscal quarter (Q1) is greater than or equal to $25 million and is less than or equal to $250 million
    • The price-to-sales ratio is less than one
    • The final results are the 25 companies with the highest relative price strength over the last 52 weeks


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    Jenna Brashear
    AAII Community Manager
    Chicago, IL
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