The performance of consumer discretionary businesses is closely linked to economic cycles. Thankfully for the industry, all signs are pointing up as discretionary stocks have gained 10.6% over the past six months, beating the S&P 500’s 6.6% return.
Nevertheless, this stability can be deceiving as many companies in this space lack recurring revenue characteristics and ride short-term fads. With that said, here are three consumer stocks we’re steering clear of.
fuboTV (FUBO)
Market Cap: $557.3 million
Originally launched as a soccer streaming platform, fuboTV (NYSE: FUBO) is a video streaming service specializing in live sports, news, and entertainment content.
Why Do We Steer Clear of FUBO?
- Sluggish trends in its domestic subscribers suggest customers aren’t adopting its solutions as quickly as the company hoped
- Persistent operating margin losses suggest the business manages its expenses poorly
- Cash burn makes us question whether it can achieve sustainable long-term growth
fuboTV’s stock price of $1.60 implies a valuation ratio of 2.3x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why FUBO doesn’t pass our bar.
Accel Entertainment (ACEL)
Market Cap: $938.6 million
Established in Illinois, Accel Entertainment (NYSE: ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.
Why Do We Avoid ACEL?
- Sluggish trends in its video gaming terminals sold suggest customers aren’t adopting its solutions as quickly as the company hoped
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Unchanged returns on capital make it difficult for the company’s valuation multiple to re-rate
At $11.29 per share, Accel Entertainment trades at 13x forward P/E. Read our free research report to see why you should think twice about including ACEL in your portfolio.
Cushman & Wakefield (CWK)
Market Cap: $3.74 billion
With expertise in the commercial real estate sector, Cushman & Wakefield (NYSE: CWK) is a global Chicago-based real estate firm offering a comprehensive range of services to clients.
Why Is CWK Risky?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 4.1% for the last five years
- Poor free cash flow margin of 2.2% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Cushman & Wakefield is trading at $16.15 per share, or 11.2x forward P/E. To fully understand why you should be careful with CWK, check out our full research report (it’s free).
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 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
