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.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. Keeping that in mind, here are two stocks poised to prove Wall Street wrong and one where the outlook is warranted.
One Stock to Sell:
Builders FirstSource (BLDR)
Consensus Price Target: $127.29 (22.7% implied return)
Headquartered in Irving, TX, Builders FirstSource (NYSE: BLDR) is a construction materials manufacturer that offers a variety of lumber and lumber-related building products.
Why Do We Avoid BLDR?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 5.7% annually over the last two years
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 31.4% annually, worse than its revenue
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Builders FirstSource’s stock price of $103.75 implies a valuation ratio of 18.7x forward P/E. If you’re considering BLDR for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
RLI (RLI)
Consensus Price Target: $59.75 (-3.1% implied return)
Founded in 1965 and named after its original focus on "replacement lens insurance" for contact lens wearers, RLI (NYSE: RLI) is a specialty insurance company that underwrites property, casualty, and surety products through wholesale brokers, independent agents, and carrier partnerships.
Why Does RLI Catch Our Eye?
- Annual revenue growth of 13.7% over the past five years was outstanding, reflecting market share gains this cycle
- Net premiums earned expanded by 13.3% annually over the last five years, demonstrating exceptional market penetration this cycle
- Industry-leading 27.9% return on equity demonstrates management’s skill in finding high-return investments
RLI is trading at $61.64 per share, or 3x forward P/B. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
ServisFirst Bancshares (SFBS)
Consensus Price Target: $92 (6.9% implied return)
Founded in 2005 with a focus on serving underserved mid-sized businesses, ServisFirst Bancshares (NYSE: SFBS) is a bank holding company that provides commercial banking services to businesses and professionals through its subsidiary ServisFirst Bank.
Why Is SFBS Interesting?
- Impressive 14.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Demand for the next 12 months is expected to accelerate above its five-year trend as Wall Street forecasts robust net interest income growth of 19.2%
- Impressive 13.1% annual tangible book value per share growth over the last five years indicates it’s building equity value this cycle
At $86.06 per share, ServisFirst Bancshares trades at 2.2x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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.
