The past year hasn't been kind to the stocks featured in this article. Each has tumbled to their lowest points in 12 months, leaving investors to decide whether they're witnessing fire sales or falling knives.
While market timing can be an extremely profitable strategy, it has burned many investors and requires rigorous analysis - something we specialize in at StockStory. That said, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.
Angi (ANGI)
One-Month Return: -30.8%
Created by IAC’s mergers of Angie’s List and HomeAdvisor, ANGI (NASDAQ: ANGI) operates the largest online marketplace for home services in the US.
Why Does ANGI Worry Us?
- Service Requests have declined by 23.3% annually over the last two years, suggesting it may need to revamp its features or user experience to stay competitive
- Forecasted revenue decline of 13% for the upcoming 12 months implies demand will fall even further
- High marketing expenses suggest it needs to spend heavily on new customer acquisition to sustain momentum
At $11.21 per share, Angi trades at 49x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than ANGI.
Zumiez (ZUMZ)
One-Month Return: -9.4%
With store associates called “Zumiez Stash Members”, Zumiez (NASDAQ: ZUMZ) is a specialty retailer of street and skate apparel, footwear, and accessories.
Why Do We Avoid ZUMZ?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Smaller revenue base of $889.2 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Poor expense management has led to operating losses
Zumiez’s stock price of $13.23 implies a valuation ratio of 34.5x forward price-to-earnings. If you’re considering ZUMZ for your portfolio, see our FREE research report to learn more.
Caleres (CAL)
One-Month Return: -5.4%
The owner of Dr. Scholl's, Caleres (NYSE: CAL) is a footwear company offering a range of styles.
Why Is CAL Risky?
- Products and services have few die-hard fans as sales have declined by 1.4% annually over the last five years
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Caleres is trading at $15.49 per share, or 5x forward price-to-earnings. To fully understand why you should be careful with CAL, check out our full research report (it’s free).
Stocks We Like More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking 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 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
