3 Out-of-Favor Stocks with Questionable Fundamentals
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.
Price charts only tell part of the story. Our team at StockStory evaluates each company's underlying fundamentals to separate temporary setbacks from structural declines. That said, here are three stocks where the skepticism is well-placed and some better opportunities to consider.
One-Month Return: -14.7%
Delighting customers since its inception in 1951, Jack in the Box (NASDAQ:JACK) is a distinctive fast-food chain known for its bold flavors, innovative menu items, and quirky marketing.
Why Do We Steer Clear of JACK?
Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 24.2 percentage points
High net-debt-to-EBITDA ratio of 10× could force the company to raise capital at unfavorable terms if market conditions deteriorate
Jack in the Box's stock price of $17.30 implies a valuation ratio of 3.3x forward P/E. Read our free research report to see why you should think twice about including JACK in your portfolio, it's free.
One-Month Return: +0.6%
Best known for its SuperPretzel soft pretzels and ICEE frozen drinks, J&J Snack Foods (NASDAQ:JJSF) produces a range of snacks and beverages and distributes them primarily to supermarket and food service customers.
Why Does JJSF Fall Short?
Smaller revenue base of $1.59 billion means it hasn't achieved the economies of scale that some industry juggernauts enjoy
Estimated sales growth of 2.8% for the next 12 months implies demand will slow from its three-year trend
Underwhelming 6.6% return on capital reflects management's difficulties in finding profitable growth opportunities
At $112.12 per share, J&J Snack Foods trades at 22x forward P/E. If you're considering JJSF for your portfolio, see our FREE research report to learn more.
One-Month Return: -2.4%
With a history dating back to 1927 and a presence in over 100 countries worldwide, Zimmer Biomet (NYSE:ZBH) designs and manufactures orthopedic products including knee and hip replacements, surgical tools, and robotic technologies for joint reconstruction and spine surgeries.
Why Are We Wary of ZBH?
Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
Constant currency revenue growth has disappointed over the past two years and shows demand was soft
Below-average returns on capital indicate management struggled to find compelling investment opportunities
Zimmer Biomet is trading at $90.40 per share, or 11x forward P/E. To fully understand why you should be careful with ZBH, check out our full research report (it's free).
Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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