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. That said, here is one stock where Wall Street’s pessimism is creating a buying opportunity and two where the skepticism is well-placed.
Two Stocks to Sell:
Guidewire (GWRE)
Consensus Price Target: $243.54 (10.6% implied return)
Founded by two individuals involved in the development of leading procurement software Ariba, Guidewire (NYSE:GWRE) offers insurance companies a software-as-a-service platform to help sell their products and manage their workflows.
Why Are We Wary of GWRE?
- Revenue increased by 12.6% annually over the last three years, acceptable on an absolute basis but tepid for a software company enjoying secular tailwinds
- Steep infrastructure costs and weaker unit economics for a software company are reflected in its low gross margin of 61.9%
Guidewire’s stock price of $220.14 implies a valuation ratio of 14.5x forward price-to-sales. To fully understand why you should be careful with GWRE, check out our full research report (it’s free).
AbbVie (ABBV)
Consensus Price Target: $209.12 (8.6% implied return)
Born from a 2013 spinoff of Abbott Laboratories' pharmaceutical business, AbbVie (NYSE:ABBV) is a biopharmaceutical company that develops and markets medications for autoimmune diseases, cancer, neurological disorders, and other complex health conditions.
Why Does ABBV Fall Short?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Costs have risen faster than its revenue over the last two years, causing its adjusted operating margin to decline by 9.2 percentage points
AbbVie is trading at $192.59 per share, or 15.1x forward P/E. Read our free research report to see why you should think twice about including ABBV in your portfolio.
One Stock to Watch:
Bentley (BSY)
Consensus Price Target: $51.61 (-7.9% implied return)
Founded by brothers Keith and Barry Bentley, Bentley Systems (NASDAQ:BSY) offers a software-as-a-service platform that addresses the lifecycle of infrastructure projects such as road networks, tunnel systems, and wastewater facilities.
Why Does BSY Stand Out?
- Platform has decent utility and becomes more valuable over time, as seen in its 109% net revenue retention rate
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Strong free cash flow margin of 31.5% enables it to reinvest or return capital consistently
At $56.01 per share, Bentley trades at 12.4x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. 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-micro-cap company Kadant (+351% 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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