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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. Keeping that in mind, here is one stock where Wall Street’s pessimism is creating a buying opportunity and two facing legitimate challenges.
Two Stocks to Sell:
Redfin (RDFN)
Consensus Price Target: $9.97 (-0.3% implied return)
Founded by a former medical school student, electrical engineer, and Amazon data engineer, Redfin (NASDAQ: RDFN) is a real estate company offering brokerage services through an online platform.
Why Do We Steer Clear of RDFN?
- Performance surrounding its partner transactions has lagged its peers
- Earnings per share fell by 10.6% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Negative earnings profile makes it challenging to secure favorable financing terms from lenders
Redfin’s stock price of $10 implies a valuation ratio of 76.6x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why RDFN doesn’t pass our bar.
John Bean (JBTM)
Consensus Price Target: $125.20 (9% implied return)
Tracing back to its invention of the mechanical milk bottle filler in 1884, John Bean (NYSE: JBT) designs, manufactures, and sells equipment used for food processing and aviation.
Why Do We Avoid JBTM?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- 6.6 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- High net-debt-to-EBITDA ratio of 5× could force the company to raise capital at unfavorable terms if market conditions deteriorate
At $114.81 per share, John Bean trades at 18.6x forward P/E. Dive into our free research report to see why there are better opportunities than JBTM.
One Stock to Buy:
Broadcom (AVGO)
Consensus Price Target: $248.78 (2.8% implied return)
Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ: AVGO) is a semiconductor conglomerate spanning wireless communications, networking, and data storage as well as infrastructure software focused on mainframes and cybersecurity.
Why Will AVGO Beat the Market?
- Annual revenue growth of 25.9% over the past two years was outstanding, reflecting market share gains this cycle
- Superior product capabilities and pricing power lead to a best-in-class gross margin of 75.4%
- Strong free cash flow margin of 41.9% enables it to reinvest or return capital consistently
Broadcom is trading at $242 per share, or 36.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 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.
