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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. That said, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Teladoc (TDOC)
Consensus Price Target: $7.68 (-16.9% implied return)
Founded to help people in rural areas get online medical consultations, Teladoc Health (NYSE: TDOC) is a telemedicine platform that facilitates remote doctor’s visits.
Why Are We Wary of TDOC?
- Flat sales over the last three years suggest it must innovate and find new ways to grow
- Preference for prioritizing user growth over monetization has led to 9% annual drops in its average revenue per user
- Projected sales for the next 12 months are flat and suggest demand will be subdued
Teladoc’s stock price of $9.23 implies a valuation ratio of 7x forward EV/EBITDA. Check out our free in-depth research report to learn more about why TDOC doesn’t pass our bar.
Texas Capital Bank (TCBI)
Consensus Price Target: $109.38 (7.3% implied return)
Founded during the Texas banking renaissance of the 1990s with an entrepreneurial spirit, Texas Capital Bancshares (NASDAQ: TCBI) is a financial services firm that provides banking, wealth management, and investment banking services to businesses and individuals across Texas and beyond.
Why Are We Hesitant About TCBI?
- Net interest income trends were unexciting over the last five years as its 5.1% annual growth was below the typical banking firm
- Estimated net interest income growth of 2.7% for the next 12 months implies demand will slow from its five-year trend
- Underwhelming 7.3% return on equity reflects management’s difficulties in finding profitable growth opportunities
At $101.97 per share, Texas Capital Bank trades at 1.3x forward P/B. Read our free research report to see why you should think twice about including TCBI in your portfolio.
Byline Bancorp (BY)
Consensus Price Target: $38.60 (3.7% implied return)
Ranking as the fifth most active Small Business Administration lender in the country, Byline Bancorp (NYSE: BY) is a Chicago-based bank that provides banking services to small and medium-sized businesses, commercial real estate developers, and consumers.
Why Are We Cautious About BY?
- 7.1% annual revenue growth over the last two years was slower than its banking peers
- Estimated net interest income growth of 3% for the next 12 months implies demand will slow from its five-year trend
- Incremental sales over the last two years were less profitable as its 4.6% annual earnings per share growth lagged its revenue gains
Byline Bancorp is trading at $37.21 per share, or 1.2x forward P/B. Dive into our free research report to see why there are better opportunities than BY.
Stocks We Like More
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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-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
