Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. That said, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.
Procter & Gamble (PG)
Consensus Price Target: $160.61 (9.6% implied return)
Founded by candle maker William Procter and soap maker James Gamble, Procter & Gamble (NYSE:PG) is a consumer products behemoth whose product portfolio spans everything from facial tissues to laundry detergent to feminine care to men’s grooming.
Why Is PG Not Exciting?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 1.9%
- Operating margin failed to increase over the last year, indicating the company couldn’t optimize its expenses
Procter & Gamble’s stock price of $146.48 implies a valuation ratio of 21.1x forward P/E. If you’re considering PG for your portfolio, see our FREE research report to learn more.
MetLife (MET)
Consensus Price Target: $105.06 (8.2% implied return)
Founded in 1863 by a group of New York businessmen during the Civil War era, MetLife (NYSE:MET) is a global financial services company that provides insurance, annuities, employee benefits, and asset management services to individuals and businesses worldwide.
Why Do We Avoid MET?
- Outsized scale creates growth headwinds as its 2.7% annualized net premiums earned increases over the last five years underperformed other financial institutions
- Earnings per share lagged its peers over the last five years as they only grew by 3.3% annually
- Book value per share tumbled by 11.7% annually over the last five years, showing insurance sector trends are working against it during this cycle
MetLife is trading at $97.06 per share, or 2.2x forward P/B. Read our free research report to see why you should think twice about including MET in your portfolio.
ProFrac (ACDC)
Consensus Price Target: $5.49 (5.8% implied return)
Operating one of the largest electric-powered fracturing fleets in North America, ProFrac (NASDAQ:ACDC) provides hydraulic fracturing services that help oil and gas companies extract hydrocarbons from underground shale formations.
Why Do We Pass on ACDC?
- High extraction costs and unfavorable asset economics are reflected in its low gross margin of 32.1%
- Efficiency has decreased over the last five years as its EBITDA margin fell by 14.8 percentage points
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 3.7% for the last five years
At $5.19 per share, ProFrac trades at 6.6x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why ACDC doesn’t pass our bar.
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.
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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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.