The past year hasn't been kind to the stocks featured in this article. Each has tumbled to their lowest points in 12 months, leaving investors to decide whether they're witnessing fire sales or falling knives.
At StockStory, we dig beneath the surface of price movements to uncover whether a company's fundamentals justify its current valuation or suggest hidden potential. That said, here are two stocks where the poor sentiment is creating a buying opportunity and one where the skepticism is well-placed.
One Stock to Sell:
Baxter (BAX)
One-Month Return: -6.2%
With a history dating back to 1931 and products used in over 100 countries, Baxter International (NYSE: BAX) provides essential healthcare products including dialysis therapies, IV solutions, infusion systems, surgical products, and patient monitoring technologies to hospitals and clinics worldwide.
Why Is BAX Risky?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Earnings per share fell by 6% annually over the last five years while its revenue was flat, showing each sale was less profitable
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up
At $16.80 per share, Baxter trades at 8.7x forward P/E. To fully understand why you should be careful with BAX, check out our full research report (it’s free).
Two Stocks to Watch:
Axon (AXON)
One-Month Return: -26.4%
Providing body cameras and tasers for first responders, AXON (NASDAQ: AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.
Why Are We Bullish on AXON?
- ARR growth averaged 39.4% over the past two years, showing customers are willing to take multi-year bets on its offerings
- Operating margin improvement of 17.2 percentage points over the last five years demonstrates its ability to scale efficiently
- Earnings per share grew by 28.8% annually over the last two years and trumped its peers
Axon is trading at $411.70 per share, or 53.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
KBR (KBR)
One-Month Return: -4.3%
Known for projects like the construction of Guantanamo Bay, KBR provides professional services and technologies, specializing in engineering, construction, and government services sectors.
Why Are We Positive On KBR?
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Share buybacks catapulted its annual earnings per share growth to 17.7%, which outperformed its revenue gains over the last five years
- Improving returns on capital reflect management’s ability to monetize investments
KBR’s stock price of $37.68 implies a valuation ratio of 9.5x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
