Consumer discretionary businesses are levered to the highs and lows of economic cycles. Over the past six months, it seems like demand may be facing some headwinds as the industry’s 6.5% return has lagged the S&P 500 by 3.1 percentage points.

A cautious approach is imperative when dabbling in these companies as many also lack recurring revenue characteristics and ride short-term fads. With that said, here are three consumer stocks best left ignored.

Inspired (INSE)

Market Cap: $247.5 million

Specializing in digital casino gaming, Inspired (NASDAQ: INSE) is a provider of gaming hardware, virtual sports platforms, and server-based gaming systems.

Why Do We Steer Clear of INSE?

1. Annual revenue growth of 9.6% over the last five years was below our standards for the consumer discretionary sector
2. Subpar operating margin of 9.6% constrains its ability to invest in process improvements or effectively respond to new competitive threats
3. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 2.9% for the last two years

Inspired is trading at $9.20 per share, or 14.7x forward P/E. To fully understand why you should be careful with INSE, check out our full research report (it’s free).

Bright Horizons (BFAM)

Market Cap: $5.21 billion

Founded in 1986, Bright Horizons (NYSE: BFAM) is a global provider of child care, early education, and workforce support solutions.

Why Do We Avoid BFAM?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Free cash flow margin is on track to jump by 1.4 percentage points next year, meaning the company will have more resources to pursue growth initiatives, repurchase shares, or pay dividends
3. Returns on capital are growing as management invests in more worthwhile ventures

Bright Horizons’s stock price of $92.17 implies a valuation ratio of 18.8x forward P/E. Read our free research report to see why you should think twice about including BFAM in your portfolio.

Hilton (HLT)

Market Cap: $70.41 billion

Founded in 1919, Hilton Worldwide (NYSE: HLT) is a global hospitality company with a portfolio of hotel brands.

Why Should You Dump HLT?

1. Weak revenue per room over the past two years indicates challenges in maintaining pricing power and occupancy rates
2. Free cash flow margin is forecasted to shrink by 3.3 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
3. Underwhelming 24.1% return on capital reflects management’s difficulties in finding profitable growth opportunities

At $303.49 per share, Hilton trades at 33.8x forward P/E. Dive into our free research report to see why there are better opportunities than HLT.

Stocks We Like More

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.