Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. Keeping that in mind, here is one stock where Wall Street’s pessimism is creating a buying opportunity and two facing legitimate challenges.
Two Stocks to Sell:
Agilysys (AGYS)
Consensus Price Target: $118.40 (8.5% implied return)
Originally a subsidiary of Pioneer-Standard Electronics that distributed electronic components, Agilysys (NASDAQ:AGYS) offers a software-as-service platform that helps hotels, resorts, restaurants, and other hospitality businesses manage their operations and workflows.
Why Do We Think Twice About AGYS?
- Sales trends were unexciting over the last three years as its 19.2% annual growth was below the typical software company
- Gross margin of 62.4% reflects its relatively high servicing costs
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 1.1 percentage points
Agilysys is trading at $109.08 per share, or 10x forward price-to-sales. If you’re considering AGYS for your portfolio, see our FREE research report to learn more.
Sportsman's Warehouse (SPWH)
Consensus Price Target: $3.20 (-20.4% implied return)
A go-to destination for individuals passionate about hunting, fishing, camping, hiking, shooting sports, and more, Sportsman's Warehouse (NASDAQ:SPWH) is an American specialty retailer offering a diverse range of active gear, equipment, and apparel.
Why Do We Pass on SPWH?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Historical operating margin losses point to an inefficient cost structure
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $4.02 per share, Sportsman's Warehouse trades at 4.3x forward EV-to-EBITDA. To fully understand why you should be careful with SPWH, check out our full research report (it’s free).
One Stock to Watch:
Abbott Laboratories (ABT)
Consensus Price Target: $140.81 (3.2% implied return)
With roots dating back to 1888 when founder Dr. Wallace Abbott began producing precise, dosage-form medications, Abbott Laboratories (NYSE:ABT) develops and sells a diverse range of healthcare products including medical devices, diagnostics, nutrition products, and branded generic pharmaceuticals.
Why Is ABT Interesting?
- Sizeable revenue base of $42.34 billion gives it economies of scale and advantages over new entrants due to the industry’s regulatory complexity
- ABT is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
- Industry-leading 13.1% return on capital demonstrates management’s skill in finding high-return investments
Abbott Laboratories’s stock price of $136.38 implies a valuation ratio of 25.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
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 6 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 Comfort Systems (+782% 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