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 are three stocks facing legitimate challenges and some alternatives worth exploring instead.
Steven Madden (SHOO)
Consensus Price Target: $46.13 (7.8% implied return)
As seen in the infamous Wolf of Wall Street movie, Steven Madden (NASDAQ: SHOO) is a fashion brand famous for its trendy and innovative footwear, appealing to a young and style-conscious audience.
Why Is SHOO Risky?
- Sales trends were unexciting over the last five years as its 13.2% annual growth was below the typical consumer discretionary company
- Poor free cash flow margin of 7.8% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Steven Madden’s stock price of $42.80 implies a valuation ratio of 20.7x forward P/E. To fully understand why you should be careful with SHOO, check out our full research report (it’s free for active Edge members).
CTS (CTS)
Consensus Price Target: $47 (5.8% implied return)
With roots dating back to 1896 and a global manufacturing footprint, CTS (NYSE: CTS) designs and manufactures sensors, connectivity components, and actuators for aerospace, defense, industrial, medical, and transportation markets.
Why Are We Hesitant About CTS?
- Annual sales declines of 3.3% for the past two years show its products and services struggled to connect with the market during this cycle
- Earnings per share have contracted by 3.5% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Waning returns on capital imply its previous profit engines are losing steam
At $44.42 per share, CTS trades at 18.6x forward P/E. Dive into our free research report to see why there are better opportunities than CTS.
Integer Holdings (ITGR)
Consensus Price Target: $85.57 (14.2% implied return)
With its name reflecting the mathematical term for "whole" or "complete," Integer Holdings (NYSE: ITGR) is a medical device outsource manufacturer that produces components and systems for cardiac, vascular, neurological, and other medical applications.
Why Do We Think Twice About ITGR?
- Subscale operations are evident in its revenue base of $1.83 billion, meaning it has fewer distribution channels than its larger rivals
- Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
- Free cash flow margin dropped by 5.9 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Integer Holdings is trading at $74.96 per share, or 12.4x forward P/E. Check out our free in-depth research report to learn more about why ITGR doesn’t pass our bar.
Stocks We Like More
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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
