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Yahoo
3 days ago
- Business
- Yahoo
3 Overrated Stocks Walking a Fine Line
The stocks in this article are all trading near their 52-week highs. This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance. But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here are three stocks that are likely overheated and some you should look into instead. One-Month Return: +5.9% Founded in 1851, The New York Times (NYSE:NYT) is an American media organization known for its influential newspaper and expansive digital journalism platforms. Why Does NYT Give Us Pause? Performance surrounding its subscribers has lagged its peers Anticipated sales growth of 6.7% for the next year implies demand will be shaky Eroding returns on capital suggest its historical profit centers are aging The New York Times is trading at $55.75 per share, or 26x forward P/E. To fully understand why you should be careful with NYT, check out our full research report (it's free). One-Month Return: +6% Constructing electrical and phone lines in the American Midwest dating back to the 1890s, MYR Group (NASDAQ:MYRG) is a specialty contractor in the electrical construction industry. Why Do We Avoid MYRG? Flat backlog over the past two years has disappointed and shows fewer customers signed long-term contracts Earnings per share fell by 1.9% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable Eroding returns on capital suggest its historical profit centers are aging At $162 per share, MYR Group trades at 26.2x forward P/E. Read our free research report to see why you should think twice about including MYRG in your portfolio, it's free. One-Month Return: +8.2% Processing over 2.8 billion insurance transaction records annually through one of the world's largest private databases, Verisk Analytics (NASDAQ:VRSK) provides data, analytics, and technology solutions that help insurance companies assess risk, detect fraud, and make better business decisions. Why Does VRSK Fall Short? Annual revenue growth of 1.9% over the last five years was below our standards for the business services sector Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 8.7% annually Verisk's stock price of $320.59 implies a valuation ratio of 44.4x forward P/E. Check out our free in-depth research report to learn more about why VRSK doesn't pass our bar. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
2 Reasons to Like RBLX (and 1 Not So Much)
What a fantastic six months it's been for Roblox. Shares of the company have skyrocketed 55.3%, setting a new 52-week high of $91.51. This run-up might have investors contemplating their next move. Following the strength, is RBLX a buy right now? Or is the market overestimating its value? Find out in our full research report, it's free. Best known for its wide assortment of user-generated content, Roblox (NYSE:RBLX) is an online gaming platform and game creation system. As a video gaming company, Roblox generates revenue growth by expanding both the number of people playing its games as well as how much each of those players spends on (or in) their games. Over the last two years, Roblox's daily active users, a key performance metric for the company, increased by 22.1% annually to 97.8 million in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction. EBITDA is a good way of judging operating profitability for consumer internet companies because it excludes various one-time or non-cash expenses (depreciation), providing a more standardized view of the business's profit potential. Roblox has been a well-oiled machine over the last two years. It demonstrated elite profitability for a consumer internet business, boasting an average EBITDA margin of 20.5%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it's a show of well-managed operations if they're high when gross margins are low. Analyzing the change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions. Roblox's earnings losses deepened over the last three years as its EPS dropped 14.2% annually. We'll keep a close eye on the company as diminishing earnings could imply changing secular trends and preferences. Roblox has huge potential even though it has some open questions, and after the recent surge, the stock trades at 53.8× forward EV/EBITDA (or $91.51 per share). Is now the right time to buy? See for yourself in our comprehensive research report, it's free. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
Yahoo
6 days ago
- Business
- Yahoo
3 Reasons to Avoid UDMY and 1 Stock to Buy Instead
Over the last six months, Udemy shares have sunk to $7.80, producing a disappointing 7.7% loss - worse than the S&P 500's 1.9% drop. This may have investors wondering how to approach the situation. Is there a buying opportunity in Udemy, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it's free. Even with the cheaper entry price, we don't have much confidence in Udemy. Here are three reasons why UDMY doesn't excite us and a stock we'd rather own. Average revenue per buyer (ARPB) is a critical metric to track because it measures how much the average buyer spends. ARPB is also a key indicator of how valuable its buyers are (and can be over time). Udemy's ARPB fell over the last two years, averaging 1.6% annual declines. This isn't great, but the increase in monthly active buyers is more relevant for assessing long-term business potential. We'll monitor the situation closely; if Udemy tries boosting ARPB by taking a more aggressive approach to monetization, it's unclear whether buyers can continue growing at the current pace. Forecasted revenues by Wall Street analysts signal a company's potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite. Over the next 12 months, sell-side analysts expect Udemy's revenue to stall, a deceleration versus its 13.3% annualized growth for the past three years. This projection doesn't excite us and suggests its products and services will see some demand headwinds. Unlike enterprise software that's typically sold by dedicated sales teams, consumer internet businesses like Udemy grow from a combination of product virality, paid advertisement, and incentives. It's very expensive for Udemy to acquire new users as the company has spent 67.6% of its gross profit on sales and marketing expenses over the last year. This inefficiency indicates a highly competitive environment with little differentiation between Udemy and its peers. Udemy isn't a terrible business, but it doesn't pass our bar. Following the recent decline, the stock trades at 12.1× forward EV/EBITDA (or $7.80 per share). Investors with a higher risk tolerance might like the company, but we think the potential downside is too great. We're pretty confident there are more exciting stocks to buy at the moment. We'd recommend looking at a dominant Aerospace business that has perfected its M&A strategy. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
28-05-2025
- Business
- Yahoo
3 Reasons to Avoid SHLS and 1 Stock to Buy Instead
Although the S&P 500 is down 1.9% over the past six months, Shoals's stock price has fallen further to $4.69, losing shareholders 10.2% of their capital. This might have investors contemplating their next move. Is there a buying opportunity in Shoals, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it's free. Even though the stock has become cheaper, we're sitting this one out for now. Here are three reasons why SHLS doesn't excite us and a stock we'd rather own. Investors interested in Renewable Energy companies should track backlog in addition to reported revenue. This metric shows the value of outstanding orders that have not yet been executed or delivered, giving visibility into Shoals's future revenue streams. Shoals's backlog came in at $645.1 million in the latest quarter, and over the last two years, its year-on-year growth averaged 2.7%. This performance was underwhelming and suggests that increasing competition is causing challenges in winning new orders. We track the long-term change in earnings per share (EPS) because it highlights whether a company's growth is profitable. Shoals's full-year EPS dropped 8.3%, or 2% annually, over the last four years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Shoals's low margin of safety could leave its stock price susceptible to large downswings. ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity). We like to invest in businesses with high returns, but the trend in a company's ROIC is what often surprises the market and moves the stock price. Unfortunately, Shoals's ROIC has decreased over the last few years. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities. Shoals's business quality ultimately falls short of our standards. Following the recent decline, the stock trades at 11× forward P/E (or $4.69 per share). While this valuation is reasonable, we don't really see a big opportunity at the moment. We're pretty confident there are superior stocks to buy right now. Let us point you toward one of our top software and edge computing picks. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. 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.
Yahoo
27-05-2025
- Business
- Yahoo
3 Reasons to Avoid CURV and 1 Stock to Buy Instead
Even during a down period for the markets, Torrid has gone against the grain, climbing to $5.15. Its shares have yielded a 27.5% return over the last six months, beating the S&P 500 by 30.8%. This was partly due to its solid quarterly results, and the run-up might have investors contemplating their next move. Is now the time to buy Torrid, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it's free. We're happy investors have made money, but we're sitting this one out for now. Here are three reasons why you should be careful with CURV and a stock we'd rather own. Same-store sales is an industry measure of whether revenue is growing at existing stores, and it is driven by customer visits (often called traffic) and the average spending per customer (ticket). Torrid's demand has been shrinking over the last two years as its same-store sales have averaged 8.3% annual declines. With $1.10 billion in revenue over the past 12 months, Torrid is a small retailer, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with suppliers. We track the change in earnings per share (EPS) because it highlights whether a company's growth is profitable. Torrid's full-year EPS dropped significantly over the last three years. In a mature sector such as consumer retail, we tend to steer our readers away from companies with falling EPS because it could imply changing secular trends and preferences. If the tide turns unexpectedly, Torrid's low margin of safety could leave its stock price susceptible to large downswings. Torrid falls short of our quality standards. With its shares outperforming the market lately, the stock trades at 22.5× forward P/E (or $5.15 per share). At this valuation, there's a lot of good news priced in - we think there are better stocks to buy right now. We'd suggest looking at one of our all-time favorite software stocks. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
