Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. Keeping that in mind, here are two stocks where Wall Street’s pessimism is creating a buying opportunity and one where the outlook is warranted.
One Stock to Sell:
Valmont (VMI)
Consensus Price Target: $415 (4.4% implied return)
Credited with an invention in the 1950s that improved crop yields, Valmont (NYSE: VMI) provides engineered products and infrastructure services for the agricultural industry.
Why Are We Hesitant About VMI?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Projected sales growth of 2.9% for the next 12 months suggests sluggish demand
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 6.8% annually
Valmont is trading at $397.39 per share, or 23.8x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including VMI in your portfolio.
Two Stocks to Buy:
Shopify (SHOP)
Consensus Price Target: $163.80 (6.7% implied return)
Starting with just three people selling snowboards online in 2004, Shopify (NYSE: SHOP) provides a comprehensive platform that enables merchants of all sizes to create, manage and grow their businesses across multiple sales channels.
Why Is SHOP a Good Business?
- Billings have averaged 29.5% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
Shopify’s stock price of $153.50 implies a valuation ratio of 16.2x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
SPX Technologies (SPXC)
Consensus Price Target: $201.44 (11.5% implied return)
With roots dating back to 1912 as the Piston Ring Company, SPX Technologies (NYSE: SPXC) supplies specialized infrastructure equipment for HVAC systems and detection and measurement applications across industrial, commercial, and utility markets.
Why Should You Buy SPXC?
- Market share has increased this cycle as its 12.5% annual revenue growth over the last two years was exceptional
- Operating margin expanded by 8.1 percentage points over the last five years as it scaled and became more efficient
- Earnings per share grew by 22.2% annually over the last two years, massively outpacing its peers
At $180.71 per share, SPX Technologies trades at 26.3x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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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