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.
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 are three stocks where the skepticism is well-placed and some better opportunities to consider.
Topgolf Callaway (MODG)
Consensus Price Target: $12.50 (7.8% implied return)
Formed between the merger of Callaway and Topgolf, Topgolf Callaway (NYSE: MODG) sells golf equipment and operates technology-driven golf entertainment venues.
Why Should You Dump MODG?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Topgolf Callaway’s stock price of $11.60 implies a valuation ratio of 5.3x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including MODG in your portfolio.
Greenbrier (GBX)
Consensus Price Target: $43.67 (-7.5% implied return)
Having designed the industry’s first double-decker railcar in the 1980s, Greenbrier (NYSE: GBX) supplies the freight rail transportation industry with railcars and related services.
Why Do We Think Twice About GBX?
- Declining unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 13.9%
- Cash-burning history makes us doubt the long-term viability of its business model
Greenbrier is trading at $47.22 per share, or 11.6x forward P/E. Check out our free in-depth research report to learn more about why GBX doesn’t pass our bar.
PennyMac Financial Services (PFSI)
Consensus Price Target: $138.57 (6.2% implied return)
Founded during the 2008 financial crisis to help address the mortgage market meltdown, PennyMac Financial Services (NYSE: PFSI) is a specialty financial services company that originates, services, and manages investments related to residential mortgage loans in the United States.
Why Are We Cautious About PFSI?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.9% annually over the last five years
- Net interest income trends were unexciting over the last five years as its 7.1% annual growth was below the typical banking firm
- Earnings per share have contracted by 4.7% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
At $130.48 per share, PennyMac Financial Services trades at 1.5x forward P/B. If you’re considering PFSI for your portfolio, see our FREE research report to learn more.
Stocks We Like More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).
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-small-cap company Exlservice (+354% 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.
