Rock-bottom prices don't always mean rock-bottom businesses. The stocks we're examining today have all touched their 52-week lows, creating a classic investor's dilemma: bargain opportunity or value trap?
Price charts only tell part of the story. Our team at StockStory evaluates each company's underlying fundamentals to separate temporary setbacks from structural declines. Keeping that in mind, here are two stocks poised to prove the bears wrong and one where the outlook is warranted.
One Stock to Sell:
Planet Fitness (PLNT)
One-Month Return: -6.3%
Founded by two brothers who purchased a struggling gym, Planet Fitness (NYSE: PLNT) is a gym franchise that caters to casual fitness users by providing a friendly and inclusive atmosphere.
Why Do We Pass on PLNT?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and in-store experience
- Projected 2.6 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Planet Fitness is trading at $73.00 per share, or 21.6x forward P/E. Read our free research report to see why you should think twice about including PLNT in your portfolio.
Two Stocks to Watch:
TPG (TPG)
One-Month Return: -11.2%
Founded in 1992 and managing over 300 active portfolio companies across more than 30 countries, TPG (NASDAQ: TPG) is a global alternative asset management firm that invests across private equity, credit, real estate, and public market strategies.
Why Are We Fans of TPG?
- Market share has increased this cycle as its 27.2% annual revenue growth over the last two years was exceptional
- Additional sales over the last two years increased its profitability as the 34.6% annual growth in its earnings per share outpaced its revenue
TPG’s stock price of $37.92 implies a valuation ratio of 13.1x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Fair Isaac Corporation (FICO)
One-Month Return: -24.5%
Creator of the three-digit number that can determine whether you get a mortgage or credit card, Fair Isaac Corporation (NYSE: FICO) develops analytics software and the widely used FICO Score, which is the standard measure of consumer credit risk in the United States.
Why Is FICO a Top Pick?
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- FICO is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
- Returns on capital are growing as management capitalizes on its market opportunities
At $1,089 per share, Fair Isaac Corporation trades at 24.2x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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.
