3 Unpopular Stocks We Steer Clear Of

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. Keeping that in mind, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.

Dropbox (DBX)

Consensus Price Target: $27.88 (-4.3% implied return)

Originally named after the founders' tendency to "drop" files into a shared folder, Dropbox (NASDAQ:DBX) provides a content collaboration platform that helps individuals and teams store, organize, share, and work on files from anywhere.

Why Do We Pass on DBX?

1. Flat billings over the last year suggest it may need to improve its products, pricing, or go-to-market strategy to reinvigorate demand
2. Estimated sales decline of 2% for the next 12 months implies a challenging demand environment
3. Efficiency has decreased over the last year as its operating margin fell by 4 percentage points

Dropbox’s stock price of $29.12 implies a valuation ratio of 3.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than DBX.

ChargePoint (CHPT)

Consensus Price Target: $11.69 (7.2% implied return)

The most prominent EV charging company during the COVID bull market, ChargePoint (NYSE:CHPT) is a provider of electric vehicle charging technology solutions in North America and Europe.

Why Does CHPT Fall Short?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 15.6% annually over the last two years
2. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

At $10.90 per share, ChargePoint trades at 0.6x forward price-to-sales. To fully understand why you should be careful with CHPT, check out our full research report (it’s free for active Edge members).

RXO (RXO)

Consensus Price Target: $16.67 (-3.3% implied return)

With access to millions of trucks, RXO (NYSE:RXO) offers full-truckload, less-than-truckload, and last-mile deliveries.

Why Does RXO Worry Us?

1. Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 5.4 percentage points
2. Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 61.7% annually
3. Underwhelming -0.5% return on capital reflects management’s difficulties in finding profitable growth opportunities

RXO is trading at $17.24 per share, or 78.2x forward P/E. If you’re considering RXO 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 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).

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