Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

3 Consumer Stocks Facing Headwinds

TGNA Cover Image

Most consumer discretionary businesses succeed or fail based on the broader economy. This sensitive demand profile can cause discretionary stocks to plummet when macro uncertainty enters the fray, and over the past six months, the industry has shed 7%. This performance was discouraging since the S&P 500 held steady.

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 we’re steering clear of.

TEGNA (TGNA)

Market Cap: $2.70 billion

Spun out of Gannett in 2015, TEGNA (NYSE: TGNA) is a media company operating a network of television stations and digital platforms, focusing on local news and community content.

Why Do We Pass on TGNA?

  1. Annual sales declines of 2.8% for the past two years show its products and services struggled to connect with the market
  2. Sales are projected to tank by 9% over the next 12 months as its demand continues evaporating
  3. Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 8.8 percentage points

TEGNA’s stock price of $16.82 implies a valuation ratio of 8.1x forward P/E. To fully understand why you should be careful with TGNA, check out our full research report (it’s free).

Wynn Resorts (WYNN)

Market Cap: $9.52 billion

Founded by the former Mirage Resorts CEO, Wynn Resorts (NASDAQ: WYNN) is a global developer and operator of high-end hotels and casinos, known for its luxurious properties and premium guest services.

Why Are We Hesitant About WYNN?

  1. 3.3% annual revenue growth over the last five years was slower than its consumer discretionary peers
  2. ROIC of 1.9% reflects management’s challenges in identifying attractive investment opportunities
  3. 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

At $91.94 per share, Wynn Resorts trades at 18.7x forward P/E. If you’re considering WYNN for your portfolio, see our FREE research report to learn more.

Somnigroup (SGI)

Market Cap: $13.72 billion

Established through the merger of Tempur-Pedic and Sealy in 2012, Somnigroup (NYSE: SGI) is a bedding manufacturer known for its innovative memory foam mattresses and sleep products

Why Is SGI Not Exciting?

  1. Sales trends were unexciting over the last two years as its 4.6% annual growth was below the typical consumer discretionary company
  2. Diminishing returns on capital suggest its earlier profit pools are drying up
  3. High net-debt-to-EBITDA ratio of 5× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Somnigroup is trading at $65.78 per share, or 22.9x forward P/E. Dive into our free research report to see why there are better opportunities than SGI.

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 Strong Momentum 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 Exlservice (+354% 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

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