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. That said, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.
Teradata (TDC)
Consensus Price Target: $27.27 (-13.4% implied return)
Pioneering data warehousing technology in the 1980s before "big data" was a common term, Teradata (NYSE:TDC) provides cloud-based data analytics and AI platforms that help large enterprises integrate, analyze, and leverage their data across multiple environments.
Why Should You Dump TDC?
- Billings have dropped by 4.4% over the last year, suggesting it might have to lower prices to stimulate growth
- Gross margin of 59.4% reflects its high servicing costs
- Static operating margin over the last year shows it couldn’t become more efficient
At $31.48 per share, Teradata trades at 1.8x forward price-to-sales. To fully understand why you should be careful with TDC, check out our full research report (it’s free for active Edge members).
Warner Bros. Discovery (WBD)
Consensus Price Target: $25.77 (-14.3% implied return)
Formed from the merger of WarnerMedia and Discovery, Warner Bros. Discovery (NASDAQ:WBD) is a multinational media and entertainment company, offering television networks, streaming services, and film and television production.
Why Do We Think WBD Will Underperform?
- Annual revenue declines of 5.1% over the last two years indicate problems with its market positioning
- Forecasted free cash flow margin suggests the company will fail to improve its cash conversion over the next year
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Warner Bros. Discovery is trading at $30.06 per share, or 8.4x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than WBD.
Werner (WERN)
Consensus Price Target: $26.67 (-13% implied return)
Conducting business in over a 100 countries, Werner (NASDAQ:WERN) offers full-truckload, less-than-truckload, and intermodal delivery services.
Why Do We Pass on WERN?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 5.1% annually over the last two years
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 55.8% annually
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Werner’s stock price of $30.67 implies a valuation ratio of 47.9x forward P/E. If you’re considering WERN 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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