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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. That said, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.
PTC (PTC)
Consensus Price Target: $186.62 (4.7% implied return)
Used to design the Airbus A380 and Boeing 787 Dreamliner commercial airplanes, PTC’s (NASDAQ: PTC) software-as-service platform helps engineers and designers create and test products before manufacturing.
Why Does PTC Worry Us?
- Annual revenue growth of 7.7% over the last three years was well below our standards for the software sector
- Offerings struggled to generate meaningful interest as its average billings growth of 4.8% over the last year did not impress
- Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
PTC is trading at $178.25 per share, or 8.1x forward price-to-sales. If you’re considering PTC for your portfolio, see our FREE research report to learn more.
Boyd Gaming (BYD)
Consensus Price Target: $80.62 (-1.2% implied return)
Run by the Boyd family, Boyd Gaming (NYSE: BYD) is a diversified operator of gaming entertainment properties across the United States, offering casino games, hotel accommodations, and dining.
Why Does BYD Give Us Pause?
- Lackluster 4.1% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
- Underwhelming 13.8% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $81.57 per share, Boyd Gaming trades at 12.7x forward P/E. To fully understand why you should be careful with BYD, check out our full research report (it’s free).
XPO (XPO)
Consensus Price Target: $127.85 (-3.2% implied return)
Owning a mobile game simulating freight operations for the Tour de France, XPO (NYSE: XPO) is a transportation company specializing in expedited shipping services.
Why Do We Steer Clear of XPO?
- Annual sales declines of 10.7% for the past five years show its products and services struggled to connect with the market during this cycle
- Flat earnings per share over the last five years lagged its peers
- 5.7 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
XPO’s stock price of $132.13 implies a valuation ratio of 32.4x forward P/E. Dive into our free research report to see why there are better opportunities than XPO.
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 9 Market-Beating Stocks. 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 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
