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.
Wayfair (W)
Consensus Price Target: $44.63 (7.1% implied return)
Founded in 2002 by Niraj Shah, Wayfair (NYSE: W) is a leading online retailer of mass-market home goods in the US, UK, Canada, and Germany.
Why Do We Pass on W?
- Value proposition isn’t resonating strongly as its active customers averaged 2.1% drops over the last two years
- Gross margin of 30.5% reflects its high servicing costs
- 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
Wayfair is trading at $41.69 per share, or 10.5x forward EV/EBITDA. Read our free research report to see why you should think twice about including W in your portfolio.
Adtalem (ATGE)
Consensus Price Target: $141.25 (6% implied return)
Formerly known as DeVry Education Group, Adtalem Global Education (NYSE: ATGE) is a global provider of workforce solutions and educational services.
Why Are We Hesitant About ATGE?
- Annual revenue growth of 9.7% over the last two years was below our standards for the consumer discretionary sector
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 1.3 percentage points over the next year
- Underwhelming 9.7% return on capital reflects management’s difficulties in finding profitable growth opportunities
Adtalem’s stock price of $133.27 implies a valuation ratio of 19.2x forward P/E. Check out our free in-depth research report to learn more about why ATGE doesn’t pass our bar.
Silgan Holdings (SLGN)
Consensus Price Target: $60.24 (11.7% implied return)
Established in 1987, Silgan Holdings (NYSE: SLGN) is a supplier of rigid packaging for consumer goods products, specializing in metal containers, closures, and plastic packaging.
Why Are We Out on SLGN?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 3% annually over the last two years
- 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
- Earnings per share have contracted by 2.7% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
At $53.92 per share, Silgan Holdings trades at 13x forward P/E. To fully understand why you should be careful with SLGN, check out 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 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
