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. Keeping that in mind, here is one stock where you should be greedy instead of fearful and two facing legitimate challenges.
Two Stocks to Sell:
Roku (ROKU)
Consensus Price Target: $85.22 (6.8% implied return)
Spun out from Netflix, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Why Are We Wary of ROKU?
- Decision to emphasize platform growth over monetization has contributed to 1.4% annual declines in its average revenue per user
- Day-to-day expenses have swelled relative to revenue over the last few years as its EBITDA margin fell by 7.1 percentage points
- Performance over the past three years shows its incremental sales were much less profitable, as its earnings per share fell by 36.7% annually
Roku is trading at $79.83 per share, or 32.1x forward EV/EBITDA. Check out our free in-depth research report to learn more about why ROKU doesn’t pass our bar.
Sirius XM (SIRI)
Consensus Price Target: $23.81 (4.1% implied return)
Known for its commercial-free music channels, Sirius XM (NASDAQ: SIRI) is a broadcasting company that provides satellite radio and online radio services across North America.
Why Do We Avoid SIRI?
- Sluggish trends in its core subscribers suggest customers aren’t adopting its solutions as quickly as the company hoped
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 36.6% annually while its revenue grew
- Waning returns on capital imply its previous profit engines are losing steam
Sirius XM’s stock price of $22.86 implies a valuation ratio of 7.6x forward P/E. If you’re considering SIRI for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Gilead Sciences (GILD)
Consensus Price Target: $115.88 (4.4% implied return)
From its groundbreaking work in developing the first single-tablet regimens for HIV treatment, Gilead Sciences (NASDAQ: GILD) develops and markets innovative medicines for life-threatening diseases including HIV, viral hepatitis, COVID-19, and cancer.
Why Does GILD Stand Out?
- $28.74 billion in revenue gives its scale, which leads to bargaining power with customers because there are few trusted alternatives
- Adjusted operating margin expanded by 17.8 percentage points over the last five years as it scaled and became more efficient
- Robust free cash flow margin of 33.2% gives it many options for capital deployment
At $111 per share, Gilead Sciences trades at 13.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. 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.
