2 Oversold Stocks Primed to Rebound and 1 Facing Challenges

Rock-bottom prices don't always mean rock-bottom businesses. The stocks we're examining today have all touched their 52-week lows, creating a classic investor's dilemma: bargain opportunity or value trap?

While market timing can be an extremely profitable strategy, it has burned many investors and requires rigorous analysis - something we specialize in at StockStory. Keeping that in mind, here are two stocks where you should be greedy instead of fearful and one where the skepticism is well-placed.

One Stock to Sell:

Rapid7 (RPD)

One-Month Return: -13.4%

With its name inspired by the need for quick responses to cyber threats, Rapid7 (NASDAQ:RPD) provides cybersecurity software and services that help organizations detect vulnerabilities, monitor threats, and respond to security incidents.

Why Should You Sell RPD?

1. Average billings growth of 3% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
2. Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
3. Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 2.6 percentage points

Rapid7 is trading at $13.59 per share, or 1x forward price-to-sales. If you’re considering RPD for your portfolio, see our FREE research report to learn more.

Two Stocks to Buy:

ServiceNow (NOW)

One-Month Return: -9.6%

Built on a single code base that processes over 4 billion workflow transactions daily, ServiceNow (NYSE:NOW) provides a cloud-based platform that helps organizations automate and digitize workflows across departments, from IT and HR to customer service and security.

Why Is NOW a Good Business?

1. Growth in its current remaining performance obligations (cRPO) has averaged 21.8% over the last year, showing it has a steady sales pipeline that will drive future revenue
2. Healthy operating margin of 13.9% shows it’s a well-run company with efficient processes, and it turbocharged its profits by achieving some fixed cost leverage
3. NOW is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

At $138.42 per share, ServiceNow trades at 2x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

Morningstar (MORN)

One-Month Return: +2.4%

Founded in 1984 by Joe Mansueto with just $80,000 in personal savings, Morningstar (NASDAQ:MORN) provides independent investment data, research, and analysis tools that help investors, advisors, and institutions make informed financial decisions.

Why Should You Buy MORN?

1. 12.3% annual revenue growth over the last five years surpassed the sector average as its products resonated with customers
2. Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
3. ROE punches in at 15.6%, illustrating management’s expertise in identifying profitable investments

Morningstar’s stock price of $215.83 implies a valuation ratio of 21.4x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.

Stocks We Like Even More

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.