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.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. That said, here is one stock where Wall Street’s pessimism is creating a buying opportunity and two where the outlook is warranted.
Two Stocks to Sell:
Frontdoor (FTDR)
Consensus Price Target: $54.25 (0.5% implied return)
Established in 2018 as a spin-off from ServiceMaster Global Holdings, Frontdoor (NASDAQ: FTDR) is a provider of home warranty and service plans.
Why Is FTDR Not Exciting?
- Demand for its offerings was relatively low as its number of home service plans has underwhelmed
- Free cash flow margin is forecasted to shrink by 2.4 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
- Eroding returns on capital suggest its historical profit centers are aging
Frontdoor’s stock price of $53.99 implies a valuation ratio of 18x forward P/E. Read our free research report to see why you should think twice about including FTDR in your portfolio.
Premier (PINC)
Consensus Price Target: $21.14 (-7.1% implied return)
Operating one of the largest healthcare group purchasing organizations in the United States with over 4,350 hospital members, Premier (NASDAQ: PINC) is a technology-driven healthcare improvement company that helps hospitals, health systems, and other providers reduce costs and improve clinical outcomes.
Why Are We Out on PINC?
- Annual sales declines of 9.3% for the past two years show its products and services struggled to connect with the market during this cycle
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Inability to adjust its cost structure while its revenue declined over the last two years led to a 11.2 percentage point drop in the company’s adjusted operating margin
At $22.75 per share, Premier trades at 16.9x forward P/E. Dive into our free research report to see why there are better opportunities than PINC.
One Stock to Watch:
Autodesk (ADSK)
Consensus Price Target: $320.15 (8.2% implied return)
Founded in 1982 by John Walker and growing into one of the industry's behemoths, Autodesk (NASDAQ: ADSK) makes computer-aided design (CAD) software for engineering, construction, and architecture companies.
Why Are We Fans of ADSK?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 14.7% over the last year
- Software is difficult to replicate at scale and leads to a best-in-class gross margin of 92%
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
Autodesk is trading at $296 per share, or 9.3x forward price-to-sales. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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.
