Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.

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 are three stocks facing legitimate challenges and some alternatives worth exploring instead.

Qualys (QLYS)

Consensus Price Target: $138.53 (27% implied return)

Originally developed to address the growing complexity of IT security in the cloud era, Qualys (NASDAQ: QLYS) provides a cloud-based platform that helps organizations identify, manage, and protect their IT assets from cyber threats across on-premises, cloud, and mobile environments.

Why Are We Cautious About QLYS?

1. Offerings struggled to generate meaningful interest as its average billings growth of 8.3% over the last year did not impress
2. Estimated sales growth of 7.8% for the next 12 months implies demand will slow from its two-year trend
3. Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient

At $109.09 per share, Qualys trades at 5.6x forward price-to-sales. Check out our free in-depth research report to learn more about why QLYS doesn’t pass our bar.

Northrop Grumman (NOC)

Consensus Price Target: $724.39 (3.7% implied return)

Responsible for the development of the first stealth bomber, Northrop Grumman (NYSE: NOC) specializes in providing aerospace, defense, and security solutions for various industry applications.

Why Are We Out on NOC?

1. 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
2. Efficiency has decreased over the last five years as its operating margin fell by 5.1 percentage points
3. Earnings growth underperformed the sector average over the last five years as its EPS grew by just 2.2% annually

Northrop Grumman’s stock price of $698.50 implies a valuation ratio of 25.6x forward P/E. To fully understand why you should be careful with NOC, check out our full research report (it’s free).

Brookdale (BKD)

Consensus Price Target: $19 (14.5% implied return)

With a network of over 650 communities serving approximately 59,000 residents across 41 states, Brookdale Senior Living (NYSE: BKD) operates senior living communities across the United States, offering independent living, assisted living, memory care, and continuing care retirement communities.

Why Are We Hesitant About BKD?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.6% annually over the last five years
2. Sales are projected to tank by 4.8% over the next 12 months as demand evaporates
3. 12× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

Brookdale is trading at $16.59 per share, or 18.3x forward EV-to-EBITDA. If you’re considering BKD for your portfolio, see our FREE research report to learn more.

High-Quality Stocks for All Market Conditions

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.