The past year hasn't been kind to the stocks featured in this article. Each has tumbled to their lowest points in 12 months, leaving investors to decide whether they're witnessing fire sales or falling knives.
While market timing can be an extremely profitable strategy, it has burned many investors and requires rigorous analysis - something we specialize in at StockStory. Keeping that in mind, here is one stock poised to prove the bears wrong and two where the skepticism is well-placed.
Two Stocks to Sell:
Rapid7 (RPD)
One-Month Return: -13.8%
With its name inspired by the need for quick responses to cyber threats, Rapid7 (NASDAQ: RPD) provides cybersecurity software and services that help organizations detect vulnerabilities, monitor threats, and respond to security incidents.
Why Do We Steer Clear of RPD?
- ARR growth averaged a weak 4.2% over the last year, suggesting that competition is pulling some attention away from its software
- Estimated sales growth of 1.8% for the next 12 months implies demand will slow from its two-year trend
- Operating margin improvement of 1.7 percentage points over the last year demonstrates its ability to scale efficiently
Rapid7’s stock price of $17.93 implies a valuation ratio of 1.3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than RPD.
Bright Horizons (BFAM)
One-Month Return: -8.2%
Founded in 1986, Bright Horizons (NYSE: BFAM) is a global provider of child care, early education, and workforce support solutions.
Why Do We Think BFAM Will Underperform?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Estimated sales growth of 7.6% for the next 12 months implies demand will slow from its two-year trend
- Underwhelming 4.7% return on capital reflects management’s difficulties in finding profitable growth opportunities
Bright Horizons is trading at $100.49 per share, or 22.3x forward P/E. Check out our free in-depth research report to learn more about why BFAM doesn’t pass our bar.
One Stock to Watch:
Light & Wonder (LNW)
One-Month Return: -13.4%
With names as crazy as Ultimate Fire Link Power 4 for its products, Light & Wonder (NASDAQ: LNW) is a gaming company supplying the casino industry with slot machines, table games, and digital games.
Why Does LNW Stand Out?
- Excellent operating margin of 21.4% highlights the efficiency of its business model
- Share buybacks catapulted its annual earnings per share growth to 25.9%, which outperformed its revenue gains over the last five years
- Rising returns on capital show the company is starting to reap the benefits of its past investments
At $76.14 per share, Light & Wonder trades at 12.1x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. 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-micro-cap company Kadant (+351% 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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