Hitting a new 52-week low can be a pivotal moment for any stock. These floors often mark either the beginning of a turnaround story or confirmation that a company faces serious headwinds.
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 skepticism is well-placed and some better opportunities to consider.
MillerKnoll (MLKN)
One-Month Return: +8.8%
Created through the 2021 merger of industry icons Herman Miller and Knoll, MillerKnoll (NASDAQ:MLKN) designs, manufactures, and distributes interior furnishings for offices, healthcare facilities, educational settings, and homes worldwide.
Why Do We Steer Clear of MLKN?
- Annual sales declines of 7.8% for the past two years show its products and services struggled to connect with the market during this cycle
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 9.6% annually while its revenue grew
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 4.7 percentage points
MillerKnoll’s stock price of $17.59 implies a valuation ratio of 7.1x forward P/E. Check out our free in-depth research report to learn more about why MLKN doesn’t pass our bar.
Omnicell (OMCL)
One-Month Return: -8.4%
Driven by the vision of an "Autonomous Pharmacy" with zero medication errors, Omnicell (NASDAQ:OMCL) provides medication management automation and adherence tools that help healthcare systems and pharmacies reduce errors and improve efficiency.
Why Do We Think OMCL Will Underperform?
- Annual sales declines of 5.4% for the past two years show its products and services struggled to connect with the market during this cycle
- Revenue base of $1.14 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 7.5% annually while its revenue grew
Omnicell is trading at $28.73 per share, or 15.6x forward P/E. If you’re considering OMCL for your portfolio, see our FREE research report to learn more.
Insperity (NSP)
One-Month Return: -16.1%
Pioneering the professional employer organization (PEO) industry it helped establish, Insperity (NYSE:NSP) provides human resources outsourcing services to small and medium-sized businesses, handling payroll, benefits, compliance, and HR administration.
Why Are We Hesitant About NSP?
- Muted 4.1% annual revenue growth over the last two years shows its demand lagged behind its business services peers
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 5.8% annually
- Free cash flow margin dropped by 5.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up
At $69.86 per share, Insperity trades at 18.9x forward P/E. To fully understand why you should be careful with NSP, check out our full research report (it’s free).
Stocks We Like More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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 176% over the last five years.
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 for free.