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.
Price charts only tell part of the story. Our team at StockStory evaluates each company’s underlying fundamentals to separate temporary setbacks from structural declines. That said, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
AECOM (ACM)
One-Month Return: -8.3%
Founded in 1990 when a group of engineers from five companies decided to merge, AECOM (NYSE:ACM) provides various infrastructure consulting services.
Why Are We Cautious About ACM?
- Sales pipeline suggests its future revenue growth won’t meet our standards as its backlog averaged 4% declines over the past two years
- Subpar operating margin of 4.8% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Low free cash flow margin of 4.4% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
AECOM is trading at $82.57 per share, or 14.1x forward P/E. If you’re considering ACM for your portfolio, see our FREE research report to learn more.
QuidelOrtho (QDEL)
One-Month Return: -27.5%
Born from the 2022 merger of Quidel and Ortho Clinical Diagnostics, QuidelOrtho (NASDAQ:QDEL) develops and manufactures diagnostic testing solutions for healthcare providers, from rapid point-of-care tests to complex laboratory instruments and systems.
Why Do We Think QDEL Will Underperform?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Free cash flow margin dropped by 21.9 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Waning returns on capital imply its previous profit engines are losing steam
At $12.00 per share, QuidelOrtho trades at 5.7x forward P/E. Dive into our free research report to see why there are better opportunities than QDEL.
MarketAxess (MKTX)
One-Month Return: -4.7%
Pioneering the shift from phone-based to electronic bond trading since 2000, MarketAxess (NASDAQ:MKTX) operates electronic trading platforms that enable institutional investors and broker-dealers to efficiently trade fixed-income securities like corporate and government bonds.
Why Do We Steer Clear of MKTX?
- 4.2% annual revenue growth over the last five years was slower than its financials peers
- Earnings per share fell by 1.3% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
MarketAxess’s stock price of $162.64 implies a valuation ratio of 20x forward P/E. Check out our free in-depth research report to learn more about why MKTX doesn’t pass our bar.
Stocks We Like 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.
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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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
