Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. Keeping that in mind, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.
UniFirst (UNF)
Consensus Price Target: $165.50 (-2.7% implied return)
With a fleet of trucks making weekly deliveries to over 300,000 customer locations, UniFirst (NYSE:UNF) provides, rents, cleans, and maintains workplace uniforms and protective clothing for businesses across various industries.
Why Do We Think Twice About UNF?
- Muted 4.4% annual revenue growth over the last two years shows its demand lagged behind its business services peers
- Estimated sales growth of 2.2% for the next 12 months implies demand will slow from its two-year trend
- Earnings per share lagged its peers over the last five years as they only grew by 2.3% annually
At $170.17 per share, UniFirst trades at 24.8x forward P/E. Check out our free in-depth research report to learn more about why UNF doesn’t pass our bar.
XPO (XPO)
Consensus Price Target: $153.16 (10.6% implied return)
Owning a mobile game simulating freight operations for the Tour de France, XPO (NYSE:XPO) is a transportation company specializing in expedited shipping services.
Why Do We Avoid XPO?
- Annual sales declines of 1.4% for the past five years show its products and services struggled to connect with the market during this cycle
- High input costs result in an inferior gross margin of 14.7% that must be offset through higher volumes
- Free cash flow margin dropped by 4.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up
XPO is trading at $138.52 per share, or 33.6x forward P/E. Dive into our free research report to see why there are better opportunities than XPO.
Radian Group (RDN)
Consensus Price Target: $39.17 (6.5% implied return)
Founded during the housing boom of 1977 and weathering multiple real estate cycles since, Radian Group (NYSE:RDN) provides mortgage insurance and real estate services, helping lenders manage risk and homebuyers achieve affordable homeownership.
Why Is RDN Not Exciting?
- Net premiums earned contracted by 3.2% annually over the last five years, showing unfavorable market dynamics this cycle
- Costs have risen faster than its revenue over the last two years, causing its combined ratio to worsen by 13.7 percentage points
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 2.2% annually
Radian Group’s stock price of $36.77 implies a valuation ratio of 1x forward P/B. If you’re considering RDN for your portfolio, see our FREE research report to learn more.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 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-small-cap company Exlservice (+354% 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.