3 Out-of-Favor Stocks We’re Skeptical Of
The past year hasn’t been kind to the stocks featured in this article. Each has tumbled to its lowest point in 12 months, leaving investors to decide whether they’re witnessing fire sales or falling knives.
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 three stocks where the outlook is warranted and some alternatives with better fundamentals.
ThredUp (TDUP)
One-Month Return: -58.9%
Founded to revolutionize thrifting, ThredUp (NASDAQ:TDUP) is a leading online fashion resale marketplace offering a wide selection of gently-used clothing and accessories.
Why Are We Out on TDUP?
- Performance surrounding its orders has lagged its peers
- Suboptimal cost structure is highlighted by its history of operating margin losses
- Forecasted free cash flow margin suggests the company will fail to improve its cash conversion over the next year
ThredUp’s stock price of $2.55 implies a valuation ratio of 20.3x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than TDUP.
BrightView (BV)
One-Month Return: -17.6%
An official field consultant for Major League Baseball, BrightView (NYSE:BV) offers landscaping design, development, and maintenance.
Why Should You Sell BV?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Earnings per share fell by 15.3% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
BrightView is trading at $11.11 per share, or 19.4x forward P/E. If you’re considering BV for your portfolio, see our FREE research report to learn more.
Supernus Pharmaceuticals (SUPN)
One-Month Return: -4.8%
With a diverse portfolio of eight FDA-approved medications targeting neurological conditions, Supernus Pharmaceuticals (NASDAQ:SUPN) develops and markets treatments for central nervous system disorders including epilepsy, ADHD, Parkinson's disease, and migraine.
Why Do We Steer Clear of SUPN?
- Annual revenue growth of 6.5% over the last five years was below our standards for the healthcare sector
- Modest revenue base of $822.8 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 16.5 percentage points
At $43.78 per share, Supernus Pharmaceuticals trades at 2.7x forward price-to-sales. To fully understand why you should be careful with SUPN, check out our full research report (it’s free).
Stocks We Like More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.