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.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. That said, here is one stock where you should be greedy instead of fearful and two facing legitimate challenges.
Two Stocks to Sell:
NeoGenomics (NEO)
Consensus Price Target: $19.72 (0.6% implied return)
Operating a network of CAP-accredited and CLIA-certified laboratories across the United States and United Kingdom, NeoGenomics (NASDAQ:NEO) provides specialized cancer diagnostic testing services, including genetic analysis, molecular testing, and pathology consultation for oncologists and healthcare providers.
Why Does NEO Give Us Pause?
- Revenue base of $766.3 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Push for growth has led to negative returns on capital, signaling value destruction
- 6× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $19.61 per share, NeoGenomics trades at 69.7x forward P/E. Check out our free in-depth research report to learn more about why NEO doesn’t pass our bar.
Nelnet (NNI)
Consensus Price Target: $130 (2.7% implied return)
Starting as a student loan servicer in the 1970s and evolving through the changing landscape of education finance, Nelnet (NYSE:NNI) provides student loan servicing, education technology, payment processing, and banking services while managing a portfolio of education loans.
Why Is NNI Not Exciting?
- 3.6% annual revenue growth over the last five years was slower than its financials peers
- Underwhelming 8.1% return on equity reflects management’s difficulties in finding profitable growth opportunities
Nelnet’s stock price of $126.58 implies a valuation ratio of 2.7x forward price-to-sales. Read our free research report to see why you should think twice about including NNI in your portfolio.
One Stock to Watch:
Distribution Solutions (DSGR)
Consensus Price Target: $35 (0.5% implied return)
Founded in 1952, Distribution Solutions (NASDAQ:DSGR) provides supply chain solutions and distributes industrial, safety, and maintenance products to various industries.
Why Does DSGR Stand Out?
- Market share has increased this cycle as its 31.9% annual revenue growth over the last five years was exceptional
- Share buybacks propelled its annual earnings per share growth to 11.4%, which outperformed its revenue gains over the last two years
- Free cash flow margin jumped by 7.7 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Distribution Solutions is trading at $34.84 per share, or 21.3x forward P/E. Is now a good time to buy? See for yourself in our full 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.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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.