1 Unpopular Stock That Deserves a Second Chance and 2 We Question

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.

Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. 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:

Zillow (ZG)

Consensus Price Target: $80.96 (5.5% implied return)

Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ:ZG) is the leading U.S. online real estate marketplace.

Why Do We Steer Clear of ZG?

1. Annual revenue declines of 7.6% over the last five years indicate problems with its market positioning
2. Poor expense management has led to operating margin losses
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Zillow’s stock price of $76.77 implies a valuation ratio of 40.9x forward P/E. Dive into our free research report to see why there are better opportunities than ZG.

SolarEdge (SEDG)

Consensus Price Target: $18.20 (-27.6% implied return)

Established in 2006, SolarEdge (NASDAQ: SEDG) creates advanced systems to improve the efficiency of solar panels.

Why Do We Avoid SEDG?

1. Sluggish trends in its megawatts shipped suggest customers aren’t adopting its solutions as quickly as the company hoped
2. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

SolarEdge is trading at $25.13 per share, or 1.2x forward price-to-sales. Read our free research report to see why you should think twice about including SEDG in your portfolio.

One Stock to Buy:

Shopify (SHOP)

Consensus Price Target: $119.80 (-3.3% implied return)

Originally created as an internal tool for a snowboarding company, Shopify (NYSE:SHOP) provides a software platform for building and operating e-commerce businesses.

Why Should You Buy SHOP?

1. Payment activity on its platform is soaring as its TPV growth averaged 31.9% over the last year, enabling the company to collect more fees and upsell additional services like banking
2. Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
3. Operating margin improvement of 28.1 percentage points over the last year demonstrates its ability to scale efficiently

At $123.91 per share, Shopify trades at 14.2x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

Donald Trump’s April 2024 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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