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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. That said, here are two stocks where Wall Street’s pessimism is creating a buying opportunity and one where the outlook is warranted.
One Stock to Sell:
Qualys (QLYS)
Consensus Price Target: $136.11 (-4% implied return)
Founded in 1999 as one of the first subscription security companies, Qualys (NASDAQ: QLYS) provides organizations with software to assess their exposure to cyber-attacks.
Why Are We Wary of QLYS?
- Average billings growth of 5.2% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Estimated sales growth of 6.6% for the next 12 months implies demand will slow from its three-year trend
- Projected 6.9 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
Qualys’s stock price of $141.77 implies a valuation ratio of 7.9x forward price-to-sales. Read our free research report to see why you should think twice about including QLYS in your portfolio.
Two Stocks to Watch:
Wingstop (WING)
Consensus Price Target: $329.52 (-12.4% implied return)
The passion project of two chicken wing aficionados in Texas, Wingstop (NASDAQ: WING) is a popular fast-food chain known for its flavorful and crispy chicken wings offered in a variety of sauces and seasonings.
Why Do We Love WING?
- Customers are lining up to eat at its restaurants as the company’s same-store sales growth averaged 16.9% over the past two years
- Healthy operating margin of 25.3% shows it’s a well-run company with efficient processes
- WING is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $376.15 per share, Wingstop trades at 94.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Republic Services (RSG)
Consensus Price Target: $257.97 (3.6% implied return)
Processing several million tons of recyclables annually, Republic (NYSE: RSG) provides waste management services for residences, companies, and municipalities.
Why Does RSG Catch Our Eye?
- Solid 9.3% annual revenue growth over the last five years indicates its offering’s solve complex business issues
- Excellent operating margin of 18.6% highlights the efficiency of its business model, and its profits increased over the last five years as it scaled
- Robust free cash flow margin of 13.5% gives it many options for capital deployment
Republic Services is trading at $249 per share, or 35.5x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even 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 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
