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.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. Keeping that in mind, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Redwire (RDW)
Consensus Price Target: $15.67 (-14.3% implied return)
Based in Jacksonville, Florida, Redwire (NYSE: RDW) is a provider of systems and components used in space infrastructure.
Why Should You Sell RDW?
- Historically negative EPS raises concerns for risk-averse investors and makes its earnings potential harder to gauge
- 14 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
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
At $18.27 per share, Redwire trades at 8.4x forward price-to-sales. To fully understand why you should be careful with RDW, check out our full research report (it’s free).
Jazz Pharmaceuticals (JAZZ)
Consensus Price Target: $253.21 (5.3% implied return)
Originally founded in 2003 and now headquartered in Ireland following a 2012 tax inversion merger, Jazz Pharmaceuticals (NASDAQGS:JAZZ) develops and markets medicines for sleep disorders, epilepsy, and cancer, with a focus on treatments for patients with limited therapeutic options.
Why Are We Hesitant About JAZZ?
- Muted 7.5% annual revenue growth over the last two years shows its demand lagged behind its healthcare peers
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 21.5 percentage points
- Earnings per share fell by 4.2% annually over the last five years while its revenue grew, partly because it diluted shareholders
Jazz Pharmaceuticals is trading at $240.46 per share, or 3.5x forward price-to-sales. If you’re considering JAZZ for your portfolio, see our FREE research report to learn more.
Bread Financial (BFH)
Consensus Price Target: $96.19 (5.6% implied return)
Formerly known as Alliance Data Systems until its 2022 rebranding, Bread Financial (NYSE: BFH) provides credit cards, installment loans, and savings products to consumers while powering branded payment solutions for retailers and merchants.
Why Does BFH Give Us Pause?
- Sales tumbled by 1.2% annually over the last two years, showing market trends are working against it during this cycle
- Earnings per share fell by 2.1% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
Bread Financial’s stock price of $91.11 implies a valuation ratio of 8.5x forward P/E. Dive into our free research report to see why there are better opportunities than BFH.
Stocks We Like More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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.
