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 are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Applied Materials (AMAT)
Consensus Price Target: $248.44 (-7.2% implied return)
Founded in 1967 as the first company to develop tools for other businesses in the semiconductor industry, Applied Materials (NASDAQ:AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Why Are We Hesitant About AMAT?
- Estimated sales growth of 1.6% for the next 12 months implies demand will slow from its two-year trend
Applied Materials’s stock price of $267.65 implies a valuation ratio of 28.2x forward P/E. To fully understand why you should be careful with AMAT, check out our full research report (it’s free for active Edge members).
Herbalife (HLF)
Consensus Price Target: $9.67 (-17.8% implied return)
With the first products sold out of the trunk of the founder’s car, Herbalife (NYSE:HLF) today offers a portfolio of shakes, supplements, personal care products, and weight management programs to help customers reach their nutritional and fitness goals.
Why Does HLF Worry Us?
- Declining unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Anticipated sales growth of 2.9% for the next year implies demand will be shaky
- Issuance of new shares over the last three years caused its earnings per share to fall by 15.9% annually, even worse than its revenue declines
At $11.76 per share, Herbalife trades at 4.6x forward P/E. Read our free research report to see why you should think twice about including HLF in your portfolio.
GE HealthCare (GEHC)
Consensus Price Target: $88.76 (6.1% implied return)
Spun off from industrial giant General Electric in 2023 after over a century as its healthcare division, GE HealthCare (NASDAQ:GEHC) provides medical imaging equipment, patient monitoring systems, diagnostic pharmaceuticals, and AI-enabled healthcare solutions to hospitals and clinics worldwide.
Why Does GEHC Fall Short?
- 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
- Earnings per share fell by 3.8% annually over the last four years while its revenue grew, showing its incremental sales were much less profitable
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7.2 percentage points
GE HealthCare is trading at $83.64 per share, or 17.8x forward P/E. If you’re considering GEHC for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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-small-cap company Exlservice (+354% 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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