2 Unpopular Stocks That Deserve a Second Chance and 1 We Ignore

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.

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. That said, here are two stocks poised to prove Wall Street wrong and one where the skepticism is well-placed.

One Stock to Sell:

Flagstar Financial (FLG)

Consensus Price Target: $13.58 (11.9% implied return)

Tracing its roots back to 1859 and rebranded from New York Community Bancorp in 2024, Flagstar Financial (NYSE:FLG) is a bank holding company that offers commercial and consumer banking services, with specialties in multi-family lending, mortgage originations, and warehouse lending.

Why Do We Avoid FLG?

1. Annual sales declines of 9.3% for the past two years show its products and services struggled to connect with the market during this cycle
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 21% annually while its revenue grew
3. Tangible book value per share tumbled by 6.7% annually over the last five years, showing banking sector trends are working against its favor during this cycle

Flagstar Financial is trading at $12.13 per share, or 0.7x forward P/B. Dive into our free research report to see why there are better opportunities than FLG.

Two Stocks to Watch:

Carvana (CVNA)

Consensus Price Target: $417.45 (6.5% implied return)

Known for its glass tower car vending machines, Carvana (NYSE:CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.

Why Does CVNA Catch Our Eye?

1. Has the opportunity to boost monetization through new features and premium offerings as its retail units sold have grown by 23.3% annually over the last two years
2. Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 40.5% outpaced its revenue gains
3. Free cash flow margin expanded by 22 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends

At $391.96 per share, Carvana trades at 23x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.

WisdomTree (WT)

Consensus Price Target: $14.46 (-1.5% implied return)

Originally founded as a financial media company before pivoting to ETF management in 2006, WisdomTree (NYSE:WT) is a financial services company that creates and manages exchange-traded funds (ETFs) and other investment products for individual and institutional investors.

Why Is WT a Top Pick?

1. Annual revenue growth of 18.6% 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 62.9% annually, topping its revenue gains
3. Market-beating return on equity illustrates that management has a knack for investing in profitable ventures

WisdomTree’s stock price of $14.68 implies a valuation ratio of 18.5x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

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 6 Stocks for this week. 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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