Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.
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 where the skepticism is well-placed and some better opportunities to consider.
Himax (HIMX)
Consensus Price Target: $8.54 (12% implied return)
Taiwan-based Himax Technologies (NASDAQ:HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones.
Why Should You Sell HIMX?
- Sales tumbled by 6% annually over the last two years, showing market trends are working against its favor during this cycle
- Forecasted revenue decline of 4.4% for the upcoming 12 months implies demand will fall even further
- Efficiency has decreased over the last five years as its operating margin fell by 22.9 percentage points
Himax’s stock price of $7.62 implies a valuation ratio of 49.2x forward P/E. To fully understand why you should be careful with HIMX, check out our full research report (it’s free for active Edge members).
Plexus (PLXS)
Consensus Price Target: $159 (13.3% implied return)
With over 20,000 team members across 26 global facilities, Plexus (NASDAQ:PLXS) designs, manufactures, and services complex electronic products for companies in aerospace/defense, healthcare, and industrial sectors.
Why Do We Steer Clear of PLXS?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.1% annually over the last two years
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 2.7% for the last five years
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $140.33 per share, Plexus trades at 18.9x forward P/E. Read our free research report to see why you should think twice about including PLXS in your portfolio.
Illumina (ILMN)
Consensus Price Target: $117.74 (-2.4% implied return)
Pioneering the ability to read the human genome at unprecedented speed and affordability, Illumina (NASDAQ:ILMN) develops and sells advanced DNA sequencing and microarray technologies that allow researchers and clinicians to analyze genetic variations and functions.
Why Does ILMN Give Us Pause?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Earnings per share fell by 2.2% annually over the last five years while its revenue grew, partly because it diluted shareholders
- Low returns on capital reflect management’s struggle to allocate funds effectively
Illumina is trading at $120.58 per share, or 24.7x forward P/E. Check out our free in-depth research report to learn more about why ILMN doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
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 Growth Stocks for this month. 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 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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