Value investing has created more billionaires than any other strategy, like Warren Buffett, who built his fortune by purchasing wonderful businesses at reasonable prices. But these hidden gems are few and far between - many stocks that appear cheap often stay that way because they face structural issues.
This distinction between true value and value traps can challenge even the most skilled investors. Luckily for you, we started StockStory to help you uncover exceptional companies. Keeping that in mind, here is one value stock with strong fundamentals and two climbing an uphill battle.
Two Value Stocks to Sell:
Sprout Social (SPT)
Forward P/S Ratio: 1.3x
Born from the recognition that businesses needed a centralized way to handle their growing social media presence, Sprout Social (NASDAQ: SPT) provides a comprehensive software platform that helps businesses manage, analyze, and optimize their presence across various social media networks.
Why Does SPT Give Us Pause?
- Average billings growth of 11% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Historical operating margin losses show it had an inefficient cost structure while scaling
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
Sprout Social’s stock price of $10.80 implies a valuation ratio of 1.3x forward price-to-sales. Check out our free in-depth research report to learn more about why SPT doesn’t pass our bar.
G-III (GIII)
Forward P/E Ratio: 12x
Founded as a small leather goods business, G-III (NASDAQ: GIII) is a fashion and apparel conglomerate with a diverse portfolio of brands.
Why Do We Think GIII Will Underperform?
- Annual revenue declines of 1.2% over the last two years indicate problems with its market positioning
- Forecasted revenue decline of 3.9% for the upcoming 12 months implies demand will fall even further
- ROIC of 8.3% reflects management’s challenges in identifying attractive investment opportunities
G-III is trading at $27.30 per share, or 12x forward P/E. Read our free research report to see why you should think twice about including GIII in your portfolio.
One Value Stock to Watch:
United Parks & Resorts (PRKS)
Forward P/E Ratio: 10.8x
Parent company of SeaWorld and home of the world-famous Shamu, United Parks & Resorts (NYSE: PRKS) is a theme park chain featuring marine life, live entertainment, roller coasters, and waterparks.
Why Could PRKS Be a Winner?
- Healthy operating margin of 26.5% shows it’s a well-run company with efficient processes
- Share buybacks catapulted its annual earnings per share growth to 23.8%, which outperformed its revenue gains over the last five years
- Returns on capital are climbing as management makes more lucrative bets
At $52.07 per share, United Parks & Resorts trades at 10.8x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. 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-micro-cap company Tecnoglass (+1,754% 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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