The past year hasn't been kind to the stocks featured in this article. Each has tumbled to their lowest points in 12 months, leaving investors to decide whether they're witnessing fire sales or falling knives.
Price charts only tell part of the story. Our team at StockStory evaluates each company's underlying fundamentals to separate temporary setbacks from structural declines. Keeping that in mind, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.
Salesforce (CRM)
One-Month Return: -1%
With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce (NYSE: CRM) provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.
Why Do We Think Twice About CRM?
- Customers were hesitant to make long-term commitments to its software as its 9% average ARR growth over the last year was sluggish
- Anticipated sales growth of 8.9% for the next year implies demand will be shaky
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
Salesforce is trading at $240.74 per share, or 5.4x forward price-to-sales. If you’re considering CRM for your portfolio, see our FREE research report to learn more.
Wyndham (WH)
One-Month Return: -9.3%
Established in 1981, Wyndham (NYSE: WH) is a global hotel franchising company with over 9,000 hotels across nearly 95 countries on six continents.
Why Does WH Worry Us?
- Softer revenue per room over the past two years suggests it might have to invest in new amenities such as restaurants and bars to attract customers
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4%
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $70.99 per share, Wyndham trades at 15.1x forward P/E. Dive into our free research report to see why there are better opportunities than WH.
American Outdoor Brands (AOUT)
One-Month Return: -13%
Spun off from Smith and Wesson in 2020, American Outdoor Brands (NASDAQ: AOUT) is an outdoor and recreational products company that offers outdoor and shooting sports products but does not sell firearms themselves.
Why Are We Out on AOUT?
- Muted 2.6% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
- Earnings per share have contracted by 34.3% annually over the last four years, a headwind for returns as stock prices often echo long-term EPS performance
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
American Outdoor Brands’s stock price of $6.47 implies a valuation ratio of 61.4x forward P/E. Check out our free in-depth research report to learn more about why AOUT doesn’t pass our bar.
Stocks We Like More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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