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.

Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. Keeping that in mind, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.

Appian (APPN)

Consensus Price Target: $41.60 (6.6% implied return)

Powering billions of transactions daily since its founding in 1999, Appian (NASDAQ: APPN) provides a low-code platform that helps businesses automate complex processes and operationalize artificial intelligence without extensive programming knowledge.

Why Are We Cautious About APPN?

1. 14.6% annual revenue growth over the last two years was slower than its software peers
2. Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
3. Projected 6 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position

At $39.03 per share, Appian trades at 3.9x forward price-to-sales. Check out our free in-depth research report to learn more about why APPN doesn’t pass our bar.

STERIS (STE)

Consensus Price Target: $281.63 (8.6% implied return)

With a mission critical role in preventing healthcare-associated infections, STERIS (NYSE: STE) provides infection prevention products, sterilization services, and medical equipment that help healthcare facilities and life science companies maintain sterile environments.

Why Are We Hesitant About STE?

1. Underwhelming 4.9% return on capital reflects management’s difficulties in finding profitable growth opportunities

STERIS is trading at $259.38 per share, or 24.4x forward P/E. Dive into our free research report to see why there are better opportunities than STE.

State Street (STT)

Consensus Price Target: $130.14 (7.7% implied return)

Dating back to 1792 when Boston's Long Wharf was the center of global shipping and trade, State Street (NYSE: STT) provides custody, investment management, and other financial services to institutional investors like pension funds, asset managers, and central banks worldwide.

Why Do We Think Twice About STT?

1. Sizable revenue base leads to growth challenges as its 3% annual revenue increases over the last five years fell short of other financials companies
2. Earnings per share lagged its peers over the last five years as they only grew by 7.3% annually

State Street’s stock price of $120.86 implies a valuation ratio of 10.7x forward P/E. Read our free research report to see why you should think twice about including STT in your portfolio.

Stocks We Like More

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 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-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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