Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like 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. That said, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.

Pegasystems (PEGA)

Consensus Price Target: $106.12 (3% implied return)

Founded by Alan Trefler in 1983, Pegasystems (NASDAQ: PEGA) offers a software-as-a-service platform to automate and optimize workflows in customer service and engagement.

Why Are We Hesitant About PEGA?

1. Sales trends were unexciting over the last three years as its 8.8% annual growth was well below the typical software company
2. Estimated sales growth of 1.2% for the next 12 months implies demand will slow from its three-year trend
3. Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions

Pegasystems’s stock price of $103 implies a valuation ratio of 5.8x forward price-to-sales. To fully understand why you should be careful with PEGA, check out our full research report (it’s free).

Lockheed Martin (LMT)

Consensus Price Target: $525.46 (9.3% implied return)

Headquartered in Maryland, Famous for the F-35 aircraft, Lockheed Martin (NYSE: LMT) specializes in defense, space, homeland security, and information technology products.

Why Do We Pass on LMT?

1. Sizable revenue base leads to growth challenges as its 3.3% annual revenue increases over the last five years fell short of other industrials companies
2. Earnings per share were flat over the last five years while its revenue grew, showing its incremental sales were less profitable
3. Eroding returns on capital suggest its historical profit centers are aging

Lockheed Martin is trading at $480.80 per share, or 17.1x forward P/E. Check out our free in-depth research report to learn more about why LMT doesn’t pass our bar.

Fastly (FSLY)

Consensus Price Target: $6.93 (-16.9% implied return)

Founded in 2011, Fastly (NYSE: FSLY) provides content delivery and edge cloud computing services, enabling enterprises and developers to deliver fast, secure, and scalable digital content and experiences.

Why Should You Dump FSLY?

1. Sales trends were unexciting over the last three years as its 14.3% annual growth was below the typical software company
2. Gross margin of 54% is way below its competitors, leaving less money to invest in areas like marketing and R&D
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

At $8.34 per share, Fastly trades at 2x forward price-to-sales. If you’re considering FSLY for your portfolio, see our FREE research report to learn more.

High-Quality Stocks for All Market Conditions

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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.