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 you should be greedy instead of fearful and two facing legitimate challenges.
Two Stocks to Sell:
GMS (GMS)
Consensus Price Target: $108.75 (-1% implied return)
Founded in 1971, GMS (NYSE:GMS) distributes specialty building materials including wallboard, ceilings, and insulation products, to the construction industry.
Why Are We Wary of GMS?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
At $109.83 per share, GMS trades at 17.8x forward P/E. To fully understand why you should be careful with GMS, check out our full research report (it’s free).
Hologic (HOLX)
Consensus Price Target: $73.40 (9.3% implied return)
As a pioneer in 3D mammography technology that has revolutionized breast cancer detection, Hologic (NASDAQ:HOLX) develops and manufactures diagnostic products, medical imaging systems, and surgical devices focused primarily on women's health and wellness.
Why Does HOLX Worry Us?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 23.6 percentage points
- Waning returns on capital imply its previous profit engines are losing steam
Hologic’s stock price of $67.14 implies a valuation ratio of 15.4x forward P/E. Dive into our free research report to see why there are better opportunities than HOLX.
One Stock to Buy:
Paymentus (PAY)
Consensus Price Target: $39 (5% implied return)
Founded in 2004 to simplify the complex world of bill payments, Paymentus (NYSE:PAY) provides a cloud-based platform that helps utilities, municipalities, and service providers automate billing and payment processes.
Why Is PAY a Good Business?
- Annual revenue growth of 36.9% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 134% annually, topping its revenue gains
Paymentus is trading at $37.15 per share, or 59.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our 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-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
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