3 Unpopular Stocks We Find Risky

Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.

At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. Keeping that in mind, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.

Floor And Decor (FND)

Consensus Price Target: $77.27 (1.8% implied return)

Operating large, warehouse-style stores, Floor & Decor (NYSE:FND) is a specialty retailer that specializes in hard flooring surfaces for the home such as tiles, hardwood, stone, and laminates.

Why Is FND Risky?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Incremental sales over the last three years were much less profitable as its earnings per share fell by 8.3% annually while its revenue grew
3. Underwhelming 8.8% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging

At $75.90 per share, Floor And Decor trades at 37.9x forward P/E. Dive into our free research report to see why there are better opportunities than FND.

Dillard's (DDS)

Consensus Price Target: $561.33 (-13.3% implied return)

With stores located largely in the Southern and Western US, Dillard’s (NYSE:DDS) is a department store chain that sells clothing, cosmetics, accessories, and home goods.

Why Are We Wary of DDS?

1. Dearth of new stores suggests management is prioritizing the optimization of its existing locations over growth
2. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
3. Earnings per share have contracted by 9.5% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance

Dillard’s stock price of $647.67 implies a valuation ratio of 23.1x forward P/E. To fully understand why you should be careful with DDS, check out our full research report (it’s free).

Kennametal (KMT)

Consensus Price Target: $29.88 (-14% implied return)

Involved in manufacturing hard tips of anti-tank projectiles in World War II, Kennametal (NYSE:KMT) is a provider of industrial materials and tools for various sectors.

Why Do We Think KMT Will Underperform?

1. Annual sales declines of 2.3% for the past two years show its products and services struggled to connect with the market during this cycle
2. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
3. Sales were less profitable over the last two years as its earnings per share fell by 4.7% annually, worse than its revenue declines

Kennametal is trading at $34.72 per share, or 20.4x forward P/E. Read our free research report to see why you should think twice about including KMT in your portfolio.

High-Quality Stocks for All Market Conditions

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check 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 244% over the last five years (as of June 30, 2025).

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