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 with Warning Signs

RDFN Cover Image

Consumer discretionary businesses are levered to the highs and lows of economic cycles. Thankfully for the industry, demand trends seem to be healthy as discretionary stocks have gained 7.4% over the past six months. This performance has nearly mirrored the S&P 500.

Although these companies have produced results lately, investors must be mindful because many are fads and only a few will stand the test of time. With that said, here are three consumer stocks we’re passing on.

Redfin (RDFN)

Market Cap: $1.43 billion

Founded by a former medical school student, electrical engineer, and Amazon data engineer, Redfin (NASDAQ: RDFN) is a real estate company offering brokerage services through an online platform.

Why Should You Sell RDFN?

  1. Number of brokerage transactions has disappointed over the past two years, indicating weak demand for its offerings
  2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 9.7% annually while its revenue grew
  3. Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes

Redfin is trading at $11.30 per share, or 86.7x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why RDFN doesn’t pass our bar.

Adtalem (ATGE)

Market Cap: $4.87 billion

Formerly known as DeVry Education Group, Adtalem Global Education (NYSE: ATGE) is a global provider of workforce solutions and educational services.

Why Does ATGE Fall Short?

  1. 11% annual revenue growth over the last two years was slower than its consumer discretionary peers
  2. Estimated sales growth of 7.5% for the next 12 months implies demand will slow from its two-year trend
  3. Low returns on capital reflect management’s struggle to allocate funds effectively

At $136.15 per share, Adtalem trades at 17.9x forward P/E. To fully understand why you should be careful with ATGE, check out our full research report (it’s free).

AMC Entertainment (AMC)

Market Cap: $1.48 billion

With a profile that was raised due to meme stock mania beginning in 2021, AMC Entertainment (NYSE: AMC) operates movie theaters primarily in the US and Europe.

Why Do We Steer Clear of AMC?

  1. Muted 5.7% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
  2. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
  3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

AMC Entertainment’s stock price of $2.89 implies a valuation ratio of 2.3x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than AMC.

Stocks We Like More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

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