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.
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. That said, here are three stocks where the skepticism is well-placed and some better opportunities to consider.
Tenable (TENB)
Consensus Price Target: $35.35 (-2% implied return)
Starting with the widely-used Nessus vulnerability scanner first released in 1998, Tenable (NASDAQ:TENB) provides exposure management solutions that help organizations identify, assess, and prioritize cybersecurity vulnerabilities across their IT infrastructure and cloud environments.
Why Does TENB Worry Us?
- Average billings growth of 7.1% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Estimated sales growth of 6.9% for the next 12 months implies demand will slow from its two-year trend
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
Tenable is trading at $36.09 per share, or 3.7x forward price-to-sales. Read our free research report to see why you should think twice about including TENB in your portfolio.
Best Buy (BBY)
Consensus Price Target: $86.70 (-7.6% implied return)
With humble beginnings as a stereo equipment seller, Best Buy (NYSE:BBY) now sells a broad selection of consumer electronics, appliances, and home office products.
Why Should You Sell BBY?
- Recent store closures and weak same-store sales point to soft demand and an operational restructuring
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Commoditized inventory, bad unit economics, and high competition are reflected in its low gross margin of 22.6%
At $93.87 per share, Best Buy trades at 13.2x forward P/E. If you’re considering BBY for your portfolio, see our FREE research report to learn more.
Charles River Laboratories (CRL)
Consensus Price Target: $284.93 (-0.1% implied return)
Named after the Massachusetts river where it was founded in 1947, Charles River Laboratories (NYSE:CRL) provides non-clinical drug development services, research models, and manufacturing support to pharmaceutical and biotechnology companies.
Why Are We Out on CRL?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Performance over the past five years shows its incremental sales were less profitable as its earnings per share were flat
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Charles River Laboratories’s stock price of $285.15 implies a valuation ratio of 22.7x forward P/E. Dive into our free research report to see why there are better opportunities than CRL.
Stocks We Like More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.