3 Value Stocks with Questionable Fundamentals

June 24, 2025 at 00:34 AM EDT

BBWI Cover Image

The low valuation multiples for value stocks provide a margin of safety that growth stocks rarely offer. However, the challenge lies in determining whether these cheap assets are genuinely undervalued or simply on sale due to their potentially deteriorating business models.

This distinction between true value and value traps can challenge even the most skilled investors. Luckily for you, we started StockStory to help you uncover exceptional companies. Keeping that in mind, here are three value stocks with little support and some other investments you should consider instead.

Bath and Body Works (BBWI)

Forward P/E Ratio: 7.9x

Spun off from L Brands in 2020, Bath & Body Works (NYSE: BBWI) is a personal care and home fragrance retailer where consumers can find specialty shower gels, scented candles for the home, and lotions.

Why Are We Hesitant About BBWI?

Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
Estimated sales growth of 2.3% for the next 12 months implies demand will slow from its six-year trend
Earnings growth underperformed the sector average over the last six years as its EPS grew by just 9.1% annually

Bath and Body Works’s stock price of $28.76 implies a valuation ratio of 7.9x forward P/E. To fully understand why you should be careful with BBWI, check out our full research report (it’s free).

TEGNA (TGNA)

Forward P/E Ratio: 8x

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 Should You Dump TGNA?

Annual revenue declines of 2.8% over the last two years indicate problems with its market positioning
Sales are projected to tank by 9% over the next 12 months as its demand continues evaporating
Free cash flow margin is forecasted to shrink by 8.8 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors

TEGNA is trading at $16.71 per share, or 8x forward P/E. Dive into our free research report to see why there are better opportunities than TGNA.

Amphastar Pharmaceuticals (AMPH)

Forward P/E Ratio: 7.5x

Founded in 1996 and known for its expertise in complex drug formulations, Amphastar Pharmaceuticals (NASDAQ: AMPH) develops and manufactures technically challenging injectable and inhalation medications, including both generic and proprietary pharmaceutical products.

Why Do We Think Twice About AMPH?

Modest revenue base of $730.7 million gives it less fixed cost leverage and fewer distribution channels than larger companies
Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend

At $25 per share, Amphastar Pharmaceuticals trades at 7.5x forward P/E. Check out our free in-depth research report to learn more about why AMPH doesn’t pass our bar.

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3 Value Stocks with Questionable Fundamentals

Bath and Body Works (BBWI)

TEGNA (TGNA)

Amphastar Pharmaceuticals (AMPH)

High-Quality Stocks for All Market Conditions

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