3 Hated Stocks with Questionable Fundamentals

Hitting a new 52-week low can be a pivotal moment for any stock. These floors often mark either the beginning of a turnaround story or confirmation that a company faces serious headwinds.

At StockStory, we dig beneath the surface of price movements to uncover whether a company's fundamentals justify its current valuation or suggest hidden potential. That said, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.

Appian (APPN)

One-Month Return: -9.6%

Founded by Matt Calkins and his three friends out of an apartment in Northern Virginia, Appian (NASDAQ:APPN) sells a software platform that lets its users build applications without using much code, allowing them to create new software more quickly.

Why Do We Think Twice About APPN?

1. Sales trends were unexciting over the last three years as its 18.7% annual growth was below the typical software company
2. Persistent operating losses suggest the business manages its expenses poorly
3. Poor free cash flow margin of 0.5% for the last year limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends

Appian’s stock price of $27.22 implies a valuation ratio of 3x forward price-to-sales. Read our free research report to see why you should think twice about including APPN in your portfolio.

Tenable (TENB)

One-Month Return: -12%

Founded in 2002 by three cybersecurity veterans, Tenable (NASDAQ:TENB) provides software as a service that helps companies understand where they are exposed to cyber security risk and how to reduce it.

Why Does TENB Give Us Pause?

1. Revenue increased by 18.5% annually over the last three years, acceptable on an absolute basis but tepid for a software company enjoying secular tailwinds
2. Estimated sales growth of 8.8% for the next 12 months implies demand will slow from its three-year trend
3. Poor expense management has led to an operating margin of -0.8% that is below the industry average

At $32.31 per share, Tenable trades at 4.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than TENB.

Texas Instruments (TXN)

One-Month Return: -18%

Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ:TXN) is the world’s largest producer of analog semiconductors.

Why Does TXN Worry Us?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 11.6% annually over the last two years
2. Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 5.8 percentage points
3. Free cash flow margin shrank by 28.4 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Texas Instruments is trading at $145.34 per share, or 26.1x forward price-to-earnings. To fully understand why you should be careful with TXN, check out our full research report (it’s free).

Stocks We Like More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking 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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.