1 Unpopular Stock That Deserves a Second Chance and 2 That Underwhelm
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 is one stock where you should be greedy instead of fearful and two facing legitimate challenges.
Two Stocks to Sell:
Qualys (QLYS)
Consensus Price Target: $179.36 (-2.3% implied return)
Originally developed to address the growing complexity of IT security in the cloud era, Qualys (NASDAQ:QLYS) provides a cloud-based platform that helps organizations identify, manage, and protect their IT assets from cyber threats across on-premises, cloud, and mobile environments.
Why Are We Cautious About QLYS?
- Average ARR growth of 10.3% over the last year has disappointed, suggesting it’s had a hard time winning long-term deals and renewals
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 8.9%
- Operating margin expanded by 3.4 percentage points over the last year as it scaled and became more efficient
At $183.50 per share, Qualys trades at 8.5x forward price-to-sales. To fully understand why you should be careful with QLYS, check out our full research report (it’s free).
Cal-Maine (CALM)
Consensus Price Target: $75 (9% implied return)
Known for brands such as Egg-Land’s Best and Land O’ Lakes, Cal-Maine (NASDAQ:CALM) produces, packages, and distributes eggs.
Why Is CALM Not Exciting?
- Products aren’t resonating with the market as its revenue declined by 2.5% annually over the last three years
- Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 25.4% annually, worse than its revenue
- Capital intensity has ramped up over the last year as its free cash flow margin decreased by 13.7 percentage points
Cal-Maine is trading at $68.78 per share, or 47.4x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including CALM in your portfolio.
One Stock to Watch:
Match Group (MTCH)
Consensus Price Target: $41.88 (2.7% implied return)
Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ:MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.
Why Are We Positive on MTCH?
- Marketing expenses show it saves money by shying from over-the-top promotions to win new users
- Excellent EBITDA margin of 37% highlights the efficiency of its business model, and its rise over the last few years was fueled by some leverage on its fixed costs
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy
Match Group’s stock price of $40.78 implies a valuation ratio of 9.2x forward EV/EBITDA. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
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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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.