Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.

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 three stocks where the skepticism is well-placed and some better opportunities to consider.

Builders FirstSource (BLDR)

Consensus Price Target: $97.38 (7.6% implied return)

Headquartered in Irving, TX, Builders FirstSource (NYSE: BLDR) is a construction materials manufacturer that offers a variety of lumber and lumber-related building products.

Why Do We Avoid BLDR?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 6.9% annually over the last two years
2. Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
3. Eroding returns on capital suggest its historical profit centers are aging

Builders FirstSource’s stock price of $90.52 implies a valuation ratio of 18.8x forward P/E. Read our free research report to see why you should think twice about including BLDR in your portfolio.

Lemonade (LMND)

Consensus Price Target: $62 (-0.6% implied return)

Built on the principle of giving back unused premiums to charitable causes selected by policyholders, Lemonade (NYSE: LMND) is a technology-driven insurance company that offers homeowners, renters, pet, car, and life insurance through an AI-powered digital platform.

Why Do We Think Twice About LMND?

1. Performance over the past two years shows its incremental sales were less profitable, as its 17% annual earnings per share growth trailed its revenue gains
2. Products and services are facing significant credit quality challenges during this cycle as book value per share has declined by 18.4% annually over the last five years
3. Negative return on equity shows management lost money while trying to expand the business

Lemonade is trading at $62.37 per share, or 9.4x forward P/B. To fully understand why you should be careful with LMND, check out our full research report (it’s free).

Frontier (ULCC)

Consensus Price Target: $5 (-33.5% implied return)

Recognizable for the colorful animals adorning each aircraft tail, Frontier Group Holdings (NASDAQ: ULCC) is an ultra low-cost airline that provides budget-friendly flights throughout the United States and select international destinations in the Americas.

Why Should You Dump ULCC?

1. Muted 3.7% annual revenue growth over the last two years shows its demand lagged behind its consumer discretionary peers
2. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

At $7.52 per share, Frontier trades at 0.4x forward price-to-sales. If you’re considering ULCC for your portfolio, see our FREE research report to learn more.

Stocks We Like More

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

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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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.