3 Unpopular Stocks We Think Twice About

When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as 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 are three stocks where the outlook is warranted and some alternatives with better fundamentals.

Analog Devices (ADI)

Consensus Price Target: $313.31 (2.8% implied return)

Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ:ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.

Why Does ADI Give Us Pause?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 5.4% annually over the last two years
2. Low returns on capital reflect management’s struggle to allocate funds effectively

At $304.88 per share, Analog Devices trades at 30.6x forward P/E. If you’re considering ADI for your portfolio, see our FREE research report to learn more.

Advance Auto Parts (AAP)

Consensus Price Target: $51.29 (6.9% implied return)

Founded in Virginia in 1932, Advance Auto Parts (NYSE:AAP) is an auto parts and accessories retailer that sells everything from carburetors to motor oil to car floor mats.

Why Do We Pass on AAP?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
2. 6.7 percentage point decline in its free cash flow margin over the last year reflects the company’s increased investments to defend its market position
3. 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

Advance Auto Parts is trading at $47.97 per share, or 18.1x forward P/E. Check out our free in-depth research report to learn more about why AAP doesn’t pass our bar.

Benchmark (BHE)

Consensus Price Target: $52 (5.6% implied return)

Operating as a critical behind-the-scenes partner for complex technology products since 1979, Benchmark Electronics (NYSE:BHE) provides advanced manufacturing, engineering, and technology solutions for original equipment manufacturers across aerospace, medical, industrial, and technology sectors.

Why Does BHE Worry Us?

1. Sales tumbled by 5.1% annually over the last two years, showing market trends are working against its favor during this cycle
2. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 5.4% annually
3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

Benchmark’s stock price of $49.27 implies a valuation ratio of 20.3x forward P/E. Read our free research report to see why you should think twice about including BHE in your portfolio.

Stocks We Like More

Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).

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.