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 where the outlook is warranted and some alternatives with better fundamentals.

Teradyne (TER)

Consensus Price Target: $449.80 (1.3% implied return)

Sporting most major chip manufacturers as its customers, Teradyne (NASDAQ: TER) is a US-based supplier of automated test equipment for semiconductors as well as other technologies and devices.

Why Is TER Not Exciting?

1. Products and services resonate with customers, evidenced by its respectable 5.3% annualized sales growth over the last five years
2. Estimated sales growth of 24.4% for the next 12 months implies demand will slow from its two-year trend
3. Free cash flow margin shrank by 6.2 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Teradyne is trading at $443.97 per share, or 42.9x forward P/E. Read our free research report to see why you should think twice about including TER in your portfolio.

Lennar (LEN)

Consensus Price Target: $86.23 (-0.4% implied return)

One of the largest homebuilders in America, Lennar (NYSE: LEN) is known for constructing affordable, move-up, and retirement homes across a range of markets and communities.

Why Do We Think LEN Will Underperform?

1. Demand cratered as it couldn’t win new orders over the past two years, leading to an average 9.2% decline in its backlog
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 8.9% annually while its revenue grew
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $86.54 per share, Lennar trades at 15.4x forward P/E. If you’re considering LEN for your portfolio, see our FREE research report to learn more.

Henry Schein (HSIC)

Consensus Price Target: $97.56 (9.9% implied return)

With a vast inventory of over 300,000 products stocked in distribution centers spanning more than 5.3 million square feet worldwide, Henry Schein (NASDAQ: HSIC) is a global distributor of healthcare products and services primarily to dental practices, medical offices, and other healthcare facilities.

Why Are We Hesitant About HSIC?

1. 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
2. Earnings growth underperformed the sector average over the last five years as its EPS grew by just 3.9% annually
3. Diminishing returns on capital suggest its earlier profit pools are drying up

Henry Schein’s stock price of $88.78 implies a valuation ratio of 15.9x forward P/E. Check out our free in-depth research report to learn more about why HSIC doesn’t pass our bar.

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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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.