3 Unpopular Stocks with Warning Signs

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. That said, here are three stocks where the skepticism is well-placed and some better opportunities to consider.

Bloomin' Brands (BLMN)

Consensus Price Target: $7.67 (0.2% implied return)

Owner of the iconic Australian-themed Outback Steakhouse, Bloomin’ Brands (NASDAQ:BLMN) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.

Why Should You Sell BLMN?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants
2. Estimated sales decline of 2.4% for the next 12 months implies an even more challenging demand environment
3. High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens

At $7.65 per share, Bloomin' Brands trades at 7.2x forward P/E. To fully understand why you should be careful with BLMN, check out our full research report (it’s free for active Edge members).

XPO (XPO)

Consensus Price Target: $141.52 (8% implied return)

Owning a mobile game simulating freight operations for the Tour de France, XPO (NYSE:XPO) is a transportation company specializing in expedited shipping services.

Why Are We Out on XPO?

1. Sales tumbled by 6.5% annually over the last five years, showing market trends are working against its favor during this cycle
2. Flat earnings per share over the last two years lagged its peers
3. 7.2 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

XPO is trading at $131.08 per share, or 31.9x forward P/E. Read our free research report to see why you should think twice about including XPO in your portfolio.

Avnet (AVT)

Consensus Price Target: $52.75 (0.7% implied return)

With a century-long history of adapting to technological evolution, Avnet (NASDAQ:AVT) is a global electronic components distributor that connects manufacturers of semiconductors and other electronic parts with businesses that need these components.

Why Do We Think Twice About AVT?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 8.5% annually over the last two years
2. Earnings per share have dipped by 34.7% annually over the past two years, which is concerning because stock prices follow EPS over the long term
3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

Avnet’s stock price of $52.37 implies a valuation ratio of 11.5x forward P/E. Check out our free in-depth research report to learn more about why AVT doesn’t pass our bar.

Stocks We Like More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum 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 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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