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. That said, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.
Alamo (ALG)
Consensus Price Target: $219.75 (8.2% implied return)
Expanding its markets through acquisitions since its founding, Alamo (NSYE:ALG) designs, manufactures, and services vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural use.
Why Are We Wary of ALG?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.3% annually over the last two years
- High input costs result in an inferior gross margin of 25.5% that must be offset through higher volumes
- Earnings per share have dipped by 5.7% annually over the past two years, which is concerning because stock prices follow EPS over the long term
Alamo’s stock price of $203.03 implies a valuation ratio of 18.6x forward P/E. Dive into our free research report to see why there are better opportunities than ALG.
Valmont (VMI)
Consensus Price Target: $490.25 (7.8% implied return)
Credited with an invention in the 1950s that improved crop yields, Valmont (NYSE: VMI) provides engineered products and infrastructure services for the agricultural industry.
Why Do We Think Twice About VMI?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.2%
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 28.5%
Valmont is trading at $454.61 per share, or 20.1x forward P/E. If you’re considering VMI for your portfolio, see our FREE research report to learn more.
Exact Sciences (EXAS)
Consensus Price Target: $105.81 (2.5% implied return)
With a mission to detect cancer earlier when it's more treatable, Exact Sciences (NASDAQ: EXAS) develops and markets cancer screening and diagnostic tests, including its flagship Cologuard stool-based colorectal cancer screening test.
Why Does EXAS Worry Us?
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Push for growth has led to negative returns on capital, signaling value destruction, and its shrinking returns suggest its past profit sources are losing steam
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $103.25 per share, Exact Sciences trades at 90.6x forward P/E. Dive into our free research report to see why there are better opportunities than EXAS.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
