3 Consumer Stocks with Open Questions

Most consumer discretionary businesses succeed or fail based on the broader economy. Unfortunately, the industry’s recent performance suggests demand may be slowing as discretionary stocks’ 6.5% return over the past six months has trailed the S&P 500 by 3.1 percentage points.

Investors should tread carefully as many companies in this space are also unpredictable because they lack recurring revenue business models. Taking that into account, here are three consumer stocks we’re swiping left on.

Crocs (CROX)

Market Cap: $4.51 billion

Founded in 2002, Crocs (NASDAQ:CROX) sells casual footwear and is known for its iconic clog shoe.

Why Should You Sell CROX?

1. Weak constant currency growth over the past two years indicates challenges in maintaining its market share
2. Free cash flow margin is on track to jump by 2 percentage points next year, meaning the company will have more resources to pursue growth initiatives, repurchase shares, or pay dividends
3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

Crocs is trading at $86.71 per share, or 7.2x forward P/E. Check out our free in-depth research report to learn more about why CROX doesn’t pass our bar.

Marriott Vacations (VAC)

Market Cap: $1.88 billion

Spun off from Marriott International in 1984, Marriott Vacations (NYSE:VAC) is a vacation company providing leisure experiences for travelers around the world.

Why Do We Avoid VAC?

1. Number of conducted tours has disappointed over the past two years, indicating weak demand for its offerings
2. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
3. 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

Marriott Vacations’s stock price of $54.41 implies a valuation ratio of 7.8x forward P/E. Dive into our free research report to see why there are better opportunities than VAC.

Live Nation (LYV)

Market Cap: $33.42 billion

Owner of Ticketmaster and operator of music festival EDC, Live Nation (NYSE:LYV) is a company specializing in live event promotion, venue management, and ticketing services for concerts and shows.

Why Is LYV Risky?

1. Sluggish trends in its events suggest customers aren’t adopting its solutions as quickly as the company hoped
2. Subpar operating margin of 4.5% constrains its ability to invest in process improvements or effectively respond to new competitive threats
3. Free cash flow margin is not anticipated to grow over the next year

At $144.33 per share, Live Nation trades at 85.6x forward P/E. If you’re considering LYV for your portfolio, see our FREE research report to learn more.

Stocks We Like 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.