When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as 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. Keeping that in mind, here is one stock poised to prove Wall Street wrong and two where the outlook is warranted.
Two Stocks to Sell:
Terex (TEX)
Consensus Price Target: $55.50 (-4.3% implied return)
With humble beginnings as a dump truck company, Terex (NYSE: TEX) today manufactures lifting and material handling equipment designed to move and hoist heavy goods and materials.
Why Does TEX Worry Us?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Earnings per share fell by 16.3% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
- 5.4 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Terex is trading at $58 per share, or 10.9x forward P/E. Check out our free in-depth research report to learn more about why TEX doesn’t pass our bar.
Snap-on (SNA)
Consensus Price Target: $361 (4.8% implied return)
Founded in 1920, Snap-on (NYSE: SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.
Why Are We Wary of SNA?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Earnings per share were flat over the last two years and fell short of the peer group average
- Diminishing returns on capital suggest its earlier profit pools are drying up
Snap-on’s stock price of $344.62 implies a valuation ratio of 17.4x forward P/E. Read our free research report to see why you should think twice about including SNA in your portfolio.
One Stock to Buy:
Super Micro (SMCI)
Consensus Price Target: $50.94 (2.5% implied return)
Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ: SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Why Are We Backing SMCI?
- Impressive 75.6% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Massive revenue base of $21.97 billion makes it a well-known name that influences purchasing decisions
- Free cash flow turned positive over the last five years, indicating the company has achieved financial self-sustainability
At $49.70 per share, Super Micro trades at 18.9x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 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 Kadant (+351% 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
