Rock-bottom prices don't always mean rock-bottom businesses. The stocks we're examining today have all touched their 52-week lows, creating a classic investor's dilemma: bargain opportunity or value trap?
While market timing can be an extremely profitable strategy, it has burned many investors and requires rigorous analysis - something we specialize in at StockStory. That said, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.
Adobe (ADBE)
One-Month Return: -5.8%
Originally named after Adobe Creek that ran behind co-founder John Warnock's house, Adobe (NASDAQ: ADBE) develops software products used for digital content creation, document management, and marketing solutions across desktop, mobile, and cloud platforms.
Why Does ADBE Worry Us?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 11.6% underwhelmed
- Estimated sales growth of 9% for the next 12 months implies demand will slow from its two-year trend
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
Adobe is trading at $328 per share, or 5.5x forward price-to-sales. If you’re considering ADBE for your portfolio, see our FREE research report to learn more.
JELD-WEN (JELD)
One-Month Return: -42.8%
Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE: JELD) manufactures doors, windows, and other related building products.
Why Do We Pass on JELD?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
JELD-WEN’s stock price of $2.61 implies a valuation ratio of 1.3x forward EV-to-EBITDA. To fully understand why you should be careful with JELD, check out our full research report (it’s free for active Edge members).
Genpact (G)
One-Month Return: +2.6%
Originally spun off from General Electric in 2005 to provide business process services, Genpact (NYSE: G) is a global professional services firm that helps businesses transform their operations through digital technology, AI, and data analytics solutions.
Why Are We Hesitant About G?
- 1.1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $41.75 per share, Genpact trades at 10.2x forward P/E. Check out our free in-depth research report to learn more about why G doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. 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-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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