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.
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 two stocks where Wall Street’s pessimism is creating a buying opportunity and one where the skepticism is well-placed.
One Stock to Sell:
Old Republic International (ORI)
Consensus Price Target: $42 (5.1% implied return)
Founded during the Roaring Twenties in 1923 and weathering nearly a century of economic cycles, Old Republic International (NYSE:ORI) is a diversified insurance holding company that provides property, liability, title, and mortgage guaranty insurance through its various subsidiaries.
Why Does ORI Give Us Pause?
- 5.2% annualized net premiums earned growth over the last five years lagged behind its insurance peers
- Earnings per share lagged its peers over the last two years as they only grew by 9.5% annually
- 8.2% annual book value per share growth over the last two years was slower than its insurance peers
Old Republic International is trading at $39.97 per share, or 1.5x forward P/B. If you’re considering ORI for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
AppLovin (APP)
Consensus Price Target: $493.19 (3.4% implied return)
Sitting at the crossroads of the mobile advertising ecosystem with over 200 free-to-play games in its portfolio, AppLovin (NASDAQ:APP) provides software solutions that help mobile app developers market, monetize, and grow their apps through AI-powered advertising and analytics tools.
Why Is APP a Top Pick?
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
- Disciplined cost controls and effective management resulted in a strong trailing 12-month operating margin of 52%, and it turbocharged its profits by achieving some fixed cost leverage
- Strong free cash flow margin of 53.7% enables it to reinvest or return capital consistently
At $477.20 per share, AppLovin trades at 26.1x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
Cadence Design Systems (CDNS)
Consensus Price Target: $369.57 (5.5% implied return)
Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ:CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors.
Why Is CDNS Interesting?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 25.5% over the last year
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- Robust free cash flow margin of 31.1% gives it many options for capital deployment
Cadence Design Systems’s stock price of $350.43 implies a valuation ratio of 17.3x forward price-to-sales. Is now a good time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum 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-micro-cap company Tecnoglass (+1,754% 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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