1 Unpopular Stock That Deserves Some Love and 2 Facing Challenges

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 facing legitimate challenges.

Two Stocks to Sell:

GMS (GMS)

Consensus Price Target: $108.75 (-1% implied return)

Founded in 1971, GMS (NYSE:GMS) distributes specialty building materials including wallboard, ceilings, and insulation products, to the construction industry.

Why Are We Wary of GMS?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
3. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

At $109.83 per share, GMS trades at 17.8x forward P/E. To fully understand why you should be careful with GMS, check out our full research report (it’s free).

Hologic (HOLX)

Consensus Price Target: $73.40 (9.3% implied return)

As a pioneer in 3D mammography technology that has revolutionized breast cancer detection, Hologic (NASDAQ:HOLX) develops and manufactures diagnostic products, medical imaging systems, and surgical devices focused primarily on women's health and wellness.

Why Does HOLX Worry Us?

1. Weak constant currency growth over the past two years indicates challenges in maintaining its market share
2. Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 23.6 percentage points
3. Waning returns on capital imply its previous profit engines are losing steam

Hologic’s stock price of $67.14 implies a valuation ratio of 15.4x forward P/E. Dive into our free research report to see why there are better opportunities than HOLX.

One Stock to Buy:

Paymentus (PAY)

Consensus Price Target: $39 (5% implied return)

Founded in 2004 to simplify the complex world of bill payments, Paymentus (NYSE:PAY) provides a cloud-based platform that helps utilities, municipalities, and service providers automate billing and payment processes.

Why Is PAY a Good Business?

1. Annual revenue growth of 36.9% over the last two years was superb and indicates its market share increased during this cycle
2. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 134% annually, topping its revenue gains

Paymentus is trading at $37.15 per share, or 59.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "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 Comfort Systems (+782% 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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