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.
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 are three stocks facing legitimate challenges and some alternatives worth exploring instead.
Coupang (CPNG)
Consensus Price Target: $29.56 (4.6% implied return)
Founded in 2010 by Harvard Business School student Bom Kim, Coupang (NYSE: CPNG) is an e-commerce giant often referred to as the "Amazon of South Korea".
Why Does CPNG Fall Short?
- Gross margin of 28% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
Coupang’s stock price of $28.26 implies a valuation ratio of 29.3x forward EV/EBITDA. If you’re considering CPNG for your portfolio, see our FREE research report to learn more.
MYR Group (MYRG)
Consensus Price Target: $171 (4.9% implied return)
Constructing electrical and phone lines in the American Midwest dating back to the 1890s, MYR Group (NASDAQ: MYRG) is a specialty contractor in the electrical construction industry.
Why Do We Think MYRG Will Underperform?
- Sales pipeline suggests its future revenue growth likely won’t meet our standards as its backlog hasn’t budged over the past two years
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 1.9% annually
- Waning returns on capital imply its previous profit engines are losing steam
At $163 per share, MYR Group trades at 26.2x forward P/E. Dive into our free research report to see why there are better opportunities than MYRG.
General Dynamics (GD)
Consensus Price Target: $293.48 (4.4% implied return)
Creator of the famous M1 Abrahms tank, General Dynamics (NYSE: GD) develops aerospace, marine systems, combat systems, and information technology products.
Why Are We Cautious About GD?
- Backlog failed to grow over the past two years, suggesting the company may need to tweak its product roadmap and go-to-market strategy
- Estimated sales growth of 3.1% for the next 12 months implies demand will slow from its two-year trend
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 4% annually
General Dynamics is trading at $281.20 per share, or 18.6x forward P/E. Read our free research report to see why you should think twice about including GD in your portfolio.
Stocks We Like More
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 6 Stocks for this week. 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-micro-cap company Kadant (+351% 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
