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.
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 is one stock where you should be greedy instead of fearful and two where the skepticism is well-placed.
Two Stocks to Sell:
IBM (IBM)
Consensus Price Target: $240.59 (9.2% implied return)
With a corporate history spanning over a century and once known for its iconic mainframe computers, IBM (NYSE: IBM) provides hybrid cloud computing platforms, AI solutions, consulting services, and enterprise infrastructure to help businesses modernize their operations.
Why Are We Hesitant About IBM?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 4.3% for the last five years
- Projected sales growth of 4.1% for the next 12 months suggests sluggish demand
- Earnings per share lagged its peers over the last two years as they only grew by 8.6% annually
IBM’s stock price of $220.25 implies a valuation ratio of 17.3x forward P/E. Dive into our free research report to see why there are better opportunities than IBM.
Universal Health Services (UHS)
Consensus Price Target: $194.35 (10.6% implied return)
With a network spanning 39 states and three countries, Universal Health Services (NYSE: UHS) operates acute care hospitals and behavioral health facilities across the United States, United Kingdom, and Puerto Rico.
Why Does UHS Give Us Pause?
- Weak comparable store sales trends over the past two years suggest there may be few opportunities in its core markets to open new facilities
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 4.6% for the last five years
Universal Health Services is trading at $175.77 per share, or 7.7x forward P/E. To fully understand why you should be careful with UHS, check out our full research report (it’s free).
One Stock to Watch:
Zebra (ZBRA)
Consensus Price Target: $411.45 (9.3% implied return)
Taking its name from the black and white stripes of barcodes, Zebra Technologies (NASDAQ: ZBRA) provides barcode scanners, mobile computers, RFID systems, and other data capture technologies that help businesses track assets and optimize operations.
Why Are We Fans of ZBRA?
- Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 13.8% over the past two years
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 49.8% exceeded its revenue gains over the last two years
- Free cash flow margin jumped by 4.8 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $376.46 per share, Zebra trades at 17.8x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
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 Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
