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 are three stocks facing legitimate challenges and some alternatives worth exploring instead.
FOX (FOXA)
Consensus Price Target: $62.14 (7% implied return)
Founded in 1915, Fox (NASDAQ: FOXA) is a diversified media company, operating prominent cable news, television broadcasting, and digital media platforms.
Why Do We Think FOXA Will Underperform?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 4.5% for the last two years
- Sales are projected to tank by 2.4% over the next 12 months as demand evaporates
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 11.2 percentage points
FOX’s stock price of $58.07 implies a valuation ratio of 13.8x forward P/E. Dive into our free research report to see why there are better opportunities than FOXA.
Paramount (PSKY)
Consensus Price Target: $13.79 (-17.8% implied return)
Owner of Spongebob Squarepants and formerly known as ViacomCBS, Paramount Global (NASDAQ: PARA) is a major media conglomerate offering television, film production, and digital content across various global platforms.
Why Is PSKY Risky?
- Annual sales declines of 2% for the past two years show its products and services struggled to connect with the market
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 15% annually
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $16.78 per share, Paramount trades at 16.9x forward P/E. If you’re considering PSKY for your portfolio, see our FREE research report to learn more.
Fortrea (FTRE)
Consensus Price Target: $9.44 (-0.1% implied return)
Spun off from Labcorp in 2023 to focus exclusively on clinical research services, Fortrea (NASDAQ: FTRE) is a contract research organization that helps pharmaceutical, biotech, and medical device companies develop and bring their products to market through clinical trials and support services.
Why Are We Out on FTRE?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 3.6% annually over the last two years
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Fortrea is trading at $9.45 per share, or 15.3x forward P/E. To fully understand why you should be careful with FTRE, check out our full research report (it’s free for active Edge members).
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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-small-cap company Comfort Systems (+782% 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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