3 Overrated Stocks with Questionable Fundamentals

Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.

However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. Keeping that in mind, here are three stocks getting more buzz than they deserve and some you should buy instead.

American Express Global Business Travel (GBTG)

One-Month Return: +22.8%

Originally spun off from American Express in 2014 but maintaining the Amex GBT brand, Global Business Travel Group (NYSE:GBTG) provides end-to-end business travel and expense management solutions, connecting corporate clients with travel suppliers and offering specialized software services.

Why Does GBTG Worry Us?

1. Estimated sales growth of 3.7% for the next 12 months implies demand will slow from its three-year trend
2. High servicing costs result in a relatively inferior gross margin of 61.1% that must be offset through increased usage
3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

American Express Global Business Travel is trading at $8.24 per share, or 1.5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than GBTG.

LendingClub (LC)

One-Month Return: +29%

Pioneering peer-to-peer lending in the US before evolving into a digital bank, LendingClub (NYSE:LC) operates a marketplace that connects borrowers with lenders, offering personal loans, auto refinancing, and banking services.

Why Does LC Fall Short?

1. Sales tumbled by 8% annually over the last two years, showing market trends are working against its favor during this cycle
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. Low return on equity reflects management’s struggle to allocate funds effectively

At $16.70 per share, LendingClub trades at 17.8x forward P/E. Read our free research report to see why you should think twice about including LC in your portfolio.

Assurant (AIZ)

One-Month Return: +15.9%

With roots dating back to 1892 when it was founded by a Civil War veteran, Assurant (NYSE:AIZ) provides specialized insurance products and services that protect major consumer purchases like mobile devices, vehicles, homes, and appliances.

Why Are We Cautious About AIZ?

1. Sizable revenue base leads to growth challenges as its 4.4% annual revenue increases over the last five years fell short of other insurance companies
2. Large revenue base constrains its growth potential, as seen in its unexciting 4.7% annualized increases in net premiums earned over the last five years fell below our expectations for the insurance sector
3. Large asset base makes it harder to grow book value per share quickly, and its annual book value per share growth of 1.4% over the last five years was below our standards for the insurance sector

Assurant’s stock price of $214.24 implies a valuation ratio of 1.9x forward P/B. If you’re considering AIZ for your portfolio, see our FREE research report to learn more.

High-Quality Stocks for All Market Conditions

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound 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 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-micro-cap company Tecnoglass (+1,754% 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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