Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. They are also bound to benefit from a friendlier regulatory environment with the Trump administration, and this excitement has led to a six-month gain of 16.5% for the sector - higher than the S&P 500’s 14.1% return.
Although these companies have produced results lately, a cautious approach is imperative. When the cycle naturally turns, the losers can be left for dead while the winners consolidate and take more of the market. On that note, here are three industrials stocks that may face trouble.
Janus (JBI)
Market Cap: $849.6 million
Standing out with its digital keyless entry into self-storage room technology, Janus (NYSE: JBI) is a provider of easily accessible self-storage solutions.
Why Does JBI Give Us Pause?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Forecasted revenue decline of 1.2% for the upcoming 12 months implies demand will fall even further
- Earnings per share have dipped by 21.6% annually over the past three years, which is concerning because stock prices follow EPS over the long term
At $6.10 per share, Janus trades at 9.9x forward P/E. If you’re considering JBI for your portfolio, see our FREE research report to learn more.
W.W. Grainger (GWW)
Market Cap: $46.39 billion
Founded as a supplier of motors, W.W. Grainger (NYSE: GWW) provides maintenance, repair, and operating (MRO) supplies and services to businesses and institutions.
Why Does GWW Worry Us?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.5%
- Earnings per share lagged its peers over the last two years as they only grew by 5.9% annually
W.W. Grainger’s stock price of $978.08 implies a valuation ratio of 22.8x forward P/E. Check out our free in-depth research report to learn more about why GWW doesn’t pass our bar.
Proto Labs (PRLB)
Market Cap: $1.23 billion
Pioneering the concept of online quoting and manufacturing for custom prototypes and low-volume production parts, Proto Labs (NYSE: PRLB) offers injection molding, 3D printing, and sheet metal fabrication for manufacturers in various industries.
Why Are We Out on PRLB?
- Annual revenue growth of 2.4% over the last two years was below our standards for the industrials sector
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Negative returns on capital show management lost money while trying to expand the business, and its decreasing returns suggest its historical profit centers are aging
Proto Labs is trading at $52.06 per share, or 31.9x forward P/E. To fully understand why you should be careful with PRLB, check out our full research report (it’s free for active Edge members).
Stocks We Like More
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The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum 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-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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