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. Keeping that in mind, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.
Planet Fitness (PLNT)
Consensus Price Target: $117.88 (6.1% implied return)
Founded by two brothers who purchased a struggling gym, Planet Fitness (NYSE: PLNT) is a gym franchise that caters to casual fitness users by providing a friendly and inclusive atmosphere.
Why Does PLNT Fall Short?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its stores
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 5.4 percentage points over the next year
- Underwhelming 13.4% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam
Planet Fitness is trading at $111.14 per share, or 36.5x forward P/E. If you’re considering PLNT for your portfolio, see our FREE research report to learn more.
PACCAR (PCAR)
Consensus Price Target: $104.45 (5% implied return)
Founded more than a century ago, PACCAR (NASDAQ: PCAR) designs and manufactures commercial trucks of various weights and sizes for the commercial trucking industry.
Why Do We Think Twice About PCAR?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
PACCAR’s stock price of $99.48 implies a valuation ratio of 18.5x forward P/E. Read our free research report to see why you should think twice about including PCAR in your portfolio.
Stocks We Like More
Donald Trump’s April 2024 "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 5 Strong Momentum 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
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