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:
Commvault (CVLT)
Consensus Price Target: $133.87 (-9.1% implied return)
Born from the need to create ironclad protection in an increasingly dangerous digital world, Commvault (NASDAQ: CVLT) provides data protection and cyber resilience software that helps organizations secure, back up, and recover their data across on-premises, hybrid, and multi-cloud environments.
Why Are We Wary of CVLT?
- Sales trends were unexciting over the last five years as its 10.3% annual growth was below the typical software company
- Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
- Operating margin dropped by 1.2 percentage points over the last year as the company focused on expansion rather than profitability
Commvault’s stock price of $147.28 implies a valuation ratio of 4.7x forward price-to-sales. To fully understand why you should be careful with CVLT, check out our full research report (it’s free).
The Cheesecake Factory (CAKE)
Consensus Price Target: $66.76 (-16.7% implied return)
Celebrated for its delicious (and free) brown bread, gigantic portions, and delectable desserts, Cheesecake Factory (NASDAQ: CAKE) is an iconic American restaurant chain that also owns and operates a portfolio of separate restaurant brands.
Why Does CAKE Give Us Pause?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
- Estimated sales growth of 4.8% for the next 12 months implies demand will slow from its seven-year trend
- High net-debt-to-EBITDA ratio of 6× could force the company to raise capital on unfavorable terms if market conditions deteriorate
The Cheesecake Factory is trading at $80.16 per share, or 19.5x forward P/E. Dive into our free research report to see why there are better opportunities than CAKE.
One Stock to Watch:
Jabil (JBL)
Consensus Price Target: $358.89 (-5.1% implied return)
With manufacturing facilities spanning the globe from China to Mexico to the United States, Jabil (NYSE: JBL) provides electronics design, manufacturing, and supply chain solutions to companies across various industries, from healthcare to automotive to cloud computing.
Why Should JBL Be on Your Watchlist?
- Massive revenue base of $33.59 billion makes it a well-known name that influences purchasing decisions
- Share repurchases over the last five years enabled its annual earnings per share growth of 18.4% to outpace its revenue gains
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its returns are climbing as it finds even more attractive growth opportunities
At $378.24 per share, Jabil trades at 27.1x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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.
