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.
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 poised to prove Wall Street wrong and two where the outlook is warranted.
Two Stocks to Sell:
Terex (TEX)
Consensus Price Target: $55.50 (-4.3% implied return)
With humble beginnings as a dump truck company, Terex (NYSE:TEX) today manufactures lifting and material handling equipment designed to move and hoist heavy goods and materials.
Why Does TEX Worry Us?
- 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 16.3% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
- 5.4 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
Terex is trading at $58 per share, or 10.9x forward P/E. Check out our free in-depth research report to learn more about why TEX doesn’t pass our bar.
Snap-on (SNA)
Consensus Price Target: $361 (4.8% implied return)
Founded in 1920, Snap-on (NYSE:SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.
Why Are We Wary of SNA?
- 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 were flat over the last two years and fell short of the peer group average
- Diminishing returns on capital suggest its earlier profit pools are drying up
Snap-on’s stock price of $344.62 implies a valuation ratio of 17.4x forward P/E. Read our free research report to see why you should think twice about including SNA in your portfolio.
One Stock to Buy:
Super Micro (SMCI)
Consensus Price Target: $50.94 (2.5% implied return)
Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ:SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Why Are We Backing SMCI?
- Impressive 75.6% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Massive revenue base of $21.97 billion makes it a well-known name that influences purchasing decisions
- Free cash flow turned positive over the last five years, indicating the company has achieved financial self-sustainability
At $49.70 per share, Super Micro trades at 18.9x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even More
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 6 Stocks for this week. 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-micro-cap company Kadant (+351% 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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