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.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. Keeping that in mind, here are three stocks where the skepticism is well-placed and some better opportunities to consider.
Thermon (THR)
Consensus Price Target: $37 (-3.8% implied return)
Creating the first packaged tracing systems, Thermon (NYSE: THR) is a leading provider of engineered industrial process heating solutions for process industries.
Why Do We Think Twice About THR?
- Annual revenue growth of 3.5% over the last two years was below our standards for the industrials sector
- Projected sales growth of 4% for the next 12 months suggests sluggish demand
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 5.6% annually
At $38.47 per share, Thermon trades at 18.7x forward P/E. Dive into our free research report to see why there are better opportunities than THR.
Proto Labs (PRLB)
Consensus Price Target: $56.67 (4.8% implied return)
Pioneering the concept of online quoting and manufacturing for custom prototypes and low-volume production parts, Proto Labs (NYSE: PRLB) offers injection molding, 3D printing, and sheet metal fabrication for manufacturers in various industries.
Why Are We Out on PRLB?
- Muted 2.4% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Earnings per share have dipped by 8.7% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- Negative returns on capital show management lost money while trying to expand the business, and its decreasing returns suggest its historical profit centers are aging
Proto Labs’s stock price of $54.06 implies a valuation ratio of 32.7x forward P/E. If you’re considering PRLB for your portfolio, see our FREE research report to learn more.
AGNC Investment (AGNC)
Consensus Price Target: $10.38 (-7% implied return)
Born during the 2008 financial crisis when mortgage markets were in turmoil, AGNC Investment (NASDAQ: AGNC) is a real estate investment trust that primarily invests in mortgage-backed securities guaranteed by U.S. government agencies or enterprises.
Why Do We Avoid AGNC?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 51.9% annually over the last five years
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Products and services are facing significant credit quality challenges during this cycle as tangible book value per share has declined by 12.2% annually over the last five years
AGNC Investment is trading at $11.15 per share, or 1.2x forward P/B. To fully understand why you should be careful with AGNC, check out our full research report (it’s free for active Edge members).
Stocks We Like More
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 9 Market-Beating Stocks. 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
