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 are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Manhattan Associates (MANH)
One-Month Return: -9.1%
Built on a "versionless" cloud architecture that delivers quarterly updates to all customers, Manhattan Associates (NASDAQ: MANH) develops cloud-based software that helps retailers, wholesalers, and manufacturers manage their supply chains, inventory, and omnichannel operations.
Why Does MANH Worry Us?
- Offerings struggled to generate meaningful interest as its average billings growth of 4.1% over the last year did not impress
- Gross margin of 56.3% reflects its high servicing costs
- Operating margin didn’t move over the last year, showing it couldn’t increase its efficiency
Manhattan Associates is trading at $136.53 per share, or 7.1x forward price-to-sales. Read our free research report to see why you should think twice about including MANH in your portfolio.
Celsius (CELH)
One-Month Return: -16.7%
With its proprietary MetaPlus formula as the basis for key products, Celsius (NASDAQ: CELH) offers energy drinks that feature natural ingredients to help in fitness and weight management.
Why Are We Hesitant About CELH?
- Efficiency has decreased over the last year as its operating margin fell by 5.9 percentage points
- Free cash flow margin dropped by 4.8 percentage points over the last year, implying the company became more capital intensive as competition picked up
- Underwhelming 2.5% return on capital reflects management’s difficulties in finding profitable growth opportunities
Celsius’s stock price of $36.07 implies a valuation ratio of 20.8x forward P/E. To fully understand why you should be careful with CELH, check out our full research report (it’s free).
Herc (HRI)
One-Month Return: -21%
Formerly a subsidiary of Hertz Corporation and with a logo that still bears some similarities to its former parent, Herc Holdings (NYSE: HRI) provides equipment rental and related services to a wide range of industries.
Why Is HRI Not Exciting?
- Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 7.3 percentage points
- Earnings per share fell by 22.1% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
- 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $95.67 per share, Herc trades at 12.9x forward P/E. Check out our free in-depth research report to learn more about why HRI doesn’t pass our bar.
Stocks We Like More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
