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. That said, here is one stock where Wall Street’s pessimism is creating a buying opportunity and two facing legitimate challenges.
Two Stocks to Sell:
IDEX (IEX)
Consensus Price Target: $255.93 (8.7% implied return)
Founded in 1988, IDEX (NYSE:IEX) is a global manufacturer specializing in highly engineered products such as pumps, flow meters, and fluidics systems for various industries.
Why Are We Hesitant About IEX?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Earnings per share lagged its peers over the last two years as they only grew by 3.5% annually
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
IDEX is trading at $235.52 per share, or 25.5x forward P/E. Read our free research report to see why you should think twice about including IEX in your portfolio.
Frontier (ULCC)
Consensus Price Target: $6.33 (10.5% implied return)
Recognizable for the colorful animals adorning each aircraft tail, Frontier Group Holdings (NASDAQ:ULCC) is an ultra low-cost airline that provides budget-friendly flights throughout the United States and select international destinations in the Americas.
Why Should You Sell ULCC?
- Annual revenue growth of 8.2% over the last two years was below our standards for the consumer discretionary sector
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- Negative EBITDA restricts its access to capital and increases the probability of shareholder dilution if things turn unexpectedly
Frontier’s stock price of $5.73 implies a valuation ratio of 6.8x forward EV-to-EBITDA. If you’re considering ULCC for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Halozyme Therapeutics (HALO)
Consensus Price Target: $101.75 (-8.2% implied return)
Known for transforming hours-long intravenous infusions into minutes-long subcutaneous injections, Halozyme Therapeutics (NASDAQ:HALO) develops and licenses its proprietary ENHANZE technology that enables subcutaneous delivery of injectable drugs that would otherwise require intravenous administration.
Why Could HALO Be a Winner?
- Annual revenue growth of 38% over the last two years was superb and indicates its market share increased during this cycle
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 24.7% annually
- HALO is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $110.78 per share, Halozyme Therapeutics trades at 11.1x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even 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 meet 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.