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. Keeping that in mind, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.
Churchill Downs (CHDN)
One-Month Return: -6.8%
Famous for hosting the Kentucky Derby, Churchill Downs (NASDAQ: CHDN) operates a horse racing, online wagering, and gaming entertainment business in the United States.
Why Are We Out on CHDN?
- Lackluster 8.7% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Returns on capital are increasing as management makes relatively better investment decisions
Churchill Downs’s stock price of $85.74 implies a valuation ratio of 12.5x forward P/E. If you’re considering CHDN for your portfolio, see our FREE research report to learn more.
Agilent (A)
One-Month Return: -4.7%
Originally spun off from Hewlett-Packard in 1999 as its measurement and analytical division, Agilent Technologies (NYSE: A) provides analytical instruments, software, services, and consumables for laboratory workflows in life sciences, diagnostics, and applied chemical markets.
Why Do We Think Twice About A?
- Annual revenue growth of 2.4% over the last two years was below our standards for the healthcare sector
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Free cash flow margin shrank by 5.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
At $114.17 per share, Agilent trades at 18.4x forward P/E. Check out our free in-depth research report to learn more about why A doesn’t pass our bar.
Wells Fargo (WFC)
One-Month Return: -8.3%
Founded during the California Gold Rush in 1852 to provide banking and express delivery services to miners and merchants, Wells Fargo (NYSE: WFC) is a diversified financial services company that provides banking, lending, investment, and wealth management services to individuals and businesses.
Why Are We Hesitant About WFC?
- Scale is a double-edged sword because it limits the firm’s growth potential compared to its smaller competitors, as reflected in its below-average annual net interest income increases of 5.1% for the last five years
- 38.7 basis point (100 basis points = 1 percentage point) decline in its net interest margin over the last two years reflects the firm’s willingness to accept lower profitability to defend its market position
- Estimated tangible book value per share growth of 5.9% for the next 12 months is soft and implies weaker profitability
Wells Fargo is trading at $73.61 per share, or 1.3x forward P/B. Dive into our free research report to see why there are better opportunities than WFC.
Stocks We Like More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
