The low valuation multiples for value stocks provide a margin of safety that growth stocks rarely offer. However, the challenge lies in determining whether these cheap assets are genuinely undervalued or simply on sale due to their potentially deteriorating business models.
This distinction between true value and value traps can challenge even the most skilled investors. Luckily for you, we started StockStory to help you uncover exceptional companies. Keeping that in mind, here is one value stock offering a compelling risk-reward profile and two best left ignored.
Two Value Stocks to Sell:
Edgewell Personal Care (EPC)
Forward P/E Ratio: 13.6x
Boasting brands such as Banana Boat, Schick, and Skintimate, Edgewell Personal Care (NYSE: EPC) sells personal care products in the skin and sun care, shave, and feminine care categories.
Why Are We Bearish on EPC?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Operating profits fell over the last year as its sales dropped and it struggled to adjust its fixed costs
- Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 6.8% annually, worse than its revenue
Edgewell Personal Care is trading at $27.45 per share, or 13.6x forward P/E. To fully understand why you should be careful with EPC, check out our full research report (it’s free).
H&R Block (HRB)
Forward P/E Ratio: 6.6x
Founded in 1955 by brothers Henry W. Bloch and Richard A. Bloch, H&R Block (NYSE: HRB) is a tax preparation company offering professional tax assistance and financial solutions to individuals and small businesses.
Why Is HRB Risky?
- Products and services aren’t resonating with the market as its revenue declined by 2.1% annually over the last five years
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 8.8% annually
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $40.66 per share, H&R Block trades at 6.6x forward P/E. Dive into our free research report to see why there are better opportunities than HRB.
One Value Stock to Watch:
EPAM (EPAM)
Forward P/E Ratio: 6.7x
Founded in 1993 during the early days of offshore software development, EPAM Systems (NYSE: EPAM) provides digital engineering, cloud, and AI transformation services to help global enterprises and startups modernize their technology systems and create digital products.
Why Does EPAM Stand Out?
- Annual revenue growth of 14.8% over the past five years was outstanding, reflecting market share gains this cycle
- Earnings per share grew by 12.2% annually over the last five years and easily exceeded the peer group average
- ROIC punches in at 22.3%, illustrating management’s expertise in identifying profitable investments
EPAM’s stock price of $89.85 implies a valuation ratio of 6.7x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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 Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
