Value stocks typically trade at discounts to the broader market, offering patient investors the opportunity to buy businesses when they’re out of favor. The key risk, however, is that these stocks are usually cheap for a reason – five cents for a piece of fruit may seem like a great deal until you find out it’s rotten.

Separating the winners from the value traps is a tough challenge, and that’s where StockStory comes in. Our job is to find you high-quality companies that will stand the test of time. Keeping that in mind, here is one value stock trading at a big discount to its intrinsic value and two best left ignored.

Two Value Stocks to Sell:

Health Catalyst (HCAT)

Forward P/S Ratio: 0.8x

Founded by healthcare professionals Tom Burton and Steve Barlow in 2008, Health Catalyst (NASDAQ: HCAT) provides data and analytics technology to healthcare organizations, enabling them to improve care and lower costs.

Why Does HCAT Give Us Pause?

1. 7% annual revenue growth over the last three years was slower than its software peers
2. Sky-high servicing costs result in an inferior gross margin of 45.9% that must be offset through increased usage
3. Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low

Health Catalyst is trading at $3.88 per share, or 0.8x forward price-to-sales. If you’re considering HCAT for your portfolio, see our FREE research report to learn more.

DXC (DXC)

Forward P/E Ratio: 4.2x

Born from the 2017 merger of Computer Sciences Corporation and HP Enterprise's services business, DXC Technology (NYSE: DXC) is a global IT services company that helps businesses transform their technology infrastructure, applications, and operations.

Why Do We Pass on DXC?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its falling returns suggest its earlier profit pools are drying up

DXC’s stock price of $14.32 implies a valuation ratio of 4.2x forward P/E. To fully understand why you should be careful with DXC, check out our full research report (it’s free).

One Value Stock to Watch:

Amgen (AMGN)

Forward P/E Ratio: 14.6x

Founded in 1980 during the early days of the biotechnology revolution, Amgen (NASDAQ: AMGN) is a biotechnology company that discovers, develops, and manufactures innovative medicines to treat serious illnesses like cancer, osteoporosis, and autoimmune diseases.

Why Could AMGN Be a Winner?

1. Solid 14.1% annual revenue growth over the last two years indicates its offering’s solve complex business issues
2. Revenue base of $34.13 billion gives it economies of scale and some negotiating power
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

At $306.59 per share, Amgen trades at 14.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. 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.

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