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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. Keeping that in mind, here is one stock where Wall Street’s pessimism is creating a buying opportunity and two where the outlook is warranted.
Two Stocks to Sell:
Teradyne (TER)
Consensus Price Target: $116.06 (3.8% implied return)
Sporting most major chip manufacturers as its customers, Teradyne (NASDAQ:TER) is a US-based supplier of automated test equipment for semiconductors as well as other technologies and devices.
Why Do We Think Twice About TER?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 14.4 percentage points
- Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 4.4% annually
Teradyne’s stock price of $111.84 implies a valuation ratio of 28.2x forward P/E. To fully understand why you should be careful with TER, check out our full research report (it’s free).
STAAR Surgical (STAA)
Consensus Price Target: $24.14 (-14.5% implied return)
With over 2.5 million implants performed worldwide, STAAR Surgical (NASDAQ:STAA) designs and manufactures implantable lenses that correct vision problems without removing the eye's natural lens.
Why Is STAA Risky?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Free cash flow margin dropped by 35.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
STAAR Surgical is trading at $28.25 per share, or 121.2x forward P/E. Check out our free in-depth research report to learn more about why STAA doesn’t pass our bar.
One Stock to Buy:
Cintas (CTAS)
Consensus Price Target: $220.06 (-0.7% implied return)
Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ:CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America.
Why Is CTAS a Top Pick?
- Solid 8.3% annual revenue growth over the last two years indicates its offering’s solve complex business issues
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 16.7% exceeded its revenue gains over the last five years
- CTAS is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $221.71 per share, Cintas trades at 45.5x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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