2 Oversold Stocks Set for a Comeback and 1 We Turn Down

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. Keeping that in mind, here are two stocks where the poor sentiment is creating a buying opportunity and one where the skepticism is well-placed.

One Stock to Sell:

Surgery Partners (SGRY)

One-Month Return: -7.7%

With more than 180 locations across 33 states serving as alternatives to traditional hospital settings, Surgery Partners (NASDAQ:SGRY) operates a national network of outpatient surgical facilities including ambulatory surgery centers and short-stay surgical hospitals.

Why Are We Hesitant About SGRY?

1. Weak unit sales over the past two years suggest it might have to lower prices to accelerate growth
2. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
3. 6× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

Surgery Partners’s stock price of $15.03 implies a valuation ratio of 22.5x forward P/E. Read our free research report to see why you should think twice about including SGRY in your portfolio.

Two Stocks to Watch:

Guidewire Software (GWRE)

One-Month Return: -28.1%

With its systems powering the operations of hundreds of insurance brands across 42 countries, Guidewire Software (NYSE:GWRE) provides a technology platform that helps property and casualty insurance companies manage their core operations, digital engagement, and analytics.

Why Does GWRE Stand Out?

1. Average billings growth of 20.7% over the last year enhances its liquidity and shows there is steady demand for its products
2. Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
3. Free cash flow generation is better than most peers and allows it to explore new investment opportunities

At $130.06 per share, Guidewire Software trades at 7.9x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

ADP (ADP)

One-Month Return: -17.6%

Processing one out of every six paychecks in the United States, ADP (NASDAQ:ADP) provides cloud-based human capital management solutions that help businesses manage payroll, benefits, talent acquisition, and HR administration.

Why Is ADP a Top Pick?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 7.8% annual sales growth over the last five years
2. ADP is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its rising cash conversion increases its margin of safety
3. Returns on capital are growing as management capitalizes on its market opportunities

ADP is trading at $216.51 per share, or 19.6x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.

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 Strong Momentum Stocks for this week. 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.