The low valuation multiples for value stocks provide a margin of safety that growth stocks rarely offer. However, the challenge lies in determining whether these cheap assets are genuinely undervalued or simply on sale due to their potentially deteriorating business models.

This distinction between true value and value traps can challenge even the most skilled investors. Luckily for you, we started StockStory to help you uncover exceptional companies. That said, here are three value stocks climbing an uphill battle and some other investments you should look into instead.

Carlisle (CSL)

Forward P/E Ratio: 14.8x

Originally founded as Carlisle Tire and Rubber Company, Carlisle Companies (NYSE: CSL) is a multi-industry product manufacturer focusing on construction materials and weatherproofing technologies.

Why Is CSL Not Exciting?

1. 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
2. Projected sales growth of 4.3% for the next 12 months suggests sluggish demand
3. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 5.3% annually

At $338 per share, Carlisle trades at 14.8x forward price-to-earnings. Check out our free in-depth research report to learn more about why CSL doesn’t pass our bar.

Allient (ALNT)

Forward P/E Ratio: 11.8x

Founded in 1962, Allient (NASDAQ: ALNT) develops and manufactures precision and specialty-controlled motion components and systems.

Why Should You Sell ALNT?

1. Muted 2.6% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
2. Projected sales are flat for the next 12 months, implying demand will slow from its two-year trend
3. Earnings per share were flat while its revenue grew over the last five years, partly because it issued new shares

Allient is trading at $21.60 per share, or 11.8x forward price-to-earnings. To fully understand why you should be careful with ALNT, check out our full research report (it’s free).

First Advantage (FA)

Forward P/E Ratio: 14.2x

Processing approximately 100 million background checks annually across more than 200 countries and territories, First Advantage (NASDAQ: FA) provides employment background screening, identity verification, and compliance solutions to help companies manage hiring risks.

Why Does FA Worry Us?

1. Muted 3.1% annual revenue growth over the last two years shows its demand lagged behind its business services peers
2. 7.5 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
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

First Advantage’s stock price of $13.83 implies a valuation ratio of 14.2x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than FA.

Stocks We Like 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 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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.