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 is one stock where you should be greedy instead of fearful and two where the skepticism is well-placed.
Two stocks to sell:
American Eagle (AEO)
Consensus price target: $18.60 (-8.6% implied return)
With a heavy focus on denim, American Eagle Outfitters (NYSE: AEO) is a specialty retailer offering an assortment of apparel and accessories to young adults.
Why Does AEO Worry Us?
- Annual revenue growth of 4.3% over the last three years was below our standards for the consumer retail sector
- Limited expansion of stores suggests it’s prioritizing efficiency over growth at this stage
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
American Eagle’s stock price of $20.35 implies a valuation ratio of 11.9x forward P/E. To fully understand why you should be careful with AEO, check out our full research report (it’s free).
SAIC (SAIC)
Consensus price target: $132.56 (-9.9% implied return)
With over five decades of experience supporting national security missions, Science Applications International Corporation (NASDAQ: SAIC) provides technical, engineering, and enterprise IT services primarily to U.S. government agencies and military branches.
Why Do We Think Twice About SAIC?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Projected sales decline of 1.5% for the next 12 months points to an even tougher demand environment ahead
SAIC is trading at $147.12 per share, or 14.7x forward P/E. Read our free research report to see why you should think twice about including SAIC in your portfolio.
One stock to watch:
Veeva Systems (VEEV)
Consensus price target: $303.52 (-0.2% implied return)
Originally named "Verticals onDemand" before rebranding in 2009, Veeva Systems (NYSE: VEEV) provides cloud software, data solutions, and consulting services that help life sciences companies develop and bring products to market more efficiently.
Why Are We Positive on VEEV?
- Billings growth has averaged 17.8% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Strong free cash flow margin of 47.4% enables it to reinvest or return capital consistently
At $304.26 per share, Veeva Systems trades at 13.1x forward price-to-sales. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks we like even 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.
