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.

Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. 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:

FormFactor (FORM)

Consensus Price Target: $37.63 (-35.8% implied return)

With customers across the foundry and fabless markets, FormFactor (NASDAQ: FORM) is a US-based provider of test and measurement technologies for semiconductors.

Why Is FORM Risky?

1. Annual revenue growth of 2.4% over the last five years was below our standards for the semiconductor sector
2. Investment activity picked up over the last five years, pressuring its weak free cash flow margin of 3.7%
3. ROIC of 8.6% reflects management’s challenges in identifying attractive investment opportunities

FormFactor’s stock price of $58.59 implies a valuation ratio of 44.8x forward P/E. Read our free research report to see why you should think twice about including FORM in your portfolio.

Papa John's (PZZA)

Consensus Price Target: $51.50 (0.6% implied return)

Founded by the eclectic John “Papa John” Schnatter, Papa John’s (NASDAQ: PZZA) is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.

Why Does PZZA Give Us Pause?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
2. Estimated sales growth of 1.5% for the next 12 months implies demand will slow from its six-year trend
3. Challenging supply chain dynamics and bad unit economics are reflected in its low gross margin of 14.8%

At $51.20 per share, Papa John's trades at 25.4x forward P/E. Dive into our free research report to see why there are better opportunities than PZZA.

One Stock to Watch:

Graham Corporation (GHM)

Consensus Price Target: $64.50 (3.7% implied return)

Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE: GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors.

Why Should GHM Be on Your Watchlist?

1. Backlog has averaged 21.7% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
2. Operating margin expanded by 4.4 percentage points over the last five years as it scaled and became more efficient
3. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 145% outpaced its revenue gains

Graham Corporation is trading at $62.20 per share, or 45.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.

Stocks We Like Even More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. 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-micro-cap company Kadant (+351% 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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