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2 Unpopular Stocks That Deserve a Second Chance and 1 We Avoid
Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. That said, here are two stocks where you should be greedy instead of fearful and one where the skepticism is well-placed.
One Stock to Sell:
Avis Budget Group (CAR)
Consensus Price Target: $134.14 (-16.1% implied return)
The parent company of brands such as Zipcar and Budget Truck Rental, Avis (NASDAQ:CAR) is a provider of car rental and mobility solutions.
Why Are We Cautious About CAR?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1% annually over the last two years
- Waning returns on capital imply its previous profit engines are losing steam
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Avis Budget Group is trading at $159.95 per share, or 28.2x forward P/E. Dive into our free research report to see why there are better opportunities than CAR.
Two Stocks to Watch:
Texas Roadhouse (TXRH)
Consensus Price Target: $198 (2.1% implied return)
With locations often featuring Western-inspired decor, Texas Roadhouse (NASDAQ:TXRH) is an American restaurant chain specializing in Southern-style cuisine and steaks.
Why Does TXRH Catch Our Eye?
- Fast expansion of new restaurants to reach markets with few or no locations is justified by its same-store sales growth
- Average same-store sales growth of 6.5% over the past two years indicates its restaurants are resonating with diners
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
At $193.94 per share, Texas Roadhouse trades at 29.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Corpay (CPAY)
Consensus Price Target: $395.14 (7% implied return)
Formerly known as FLEETCOR until its 2024 rebrand, Corpay (NYSE:CPAY) provides specialized payment solutions for businesses to manage vehicle expenses, corporate payments, and lodging costs with enhanced control and reporting capabilities.
What Makes CPAY Stand Out?
- Annual revenue growth of 15.4% over the past five years was outstanding, reflecting market share gains this cycle
- Earnings growth has topped the peer group average over the last five years as its EPS has compounded at 15.8% annually
- ROE punches in at 31.7%, illustrating management’s expertise in identifying profitable investments
Corpay’s stock price of $369.43 implies a valuation ratio of 13.1x 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.