The past year hasn't been kind to the stocks featured in this article. Each has tumbled to their lowest points in 12 months, leaving investors to decide whether they're witnessing fire sales or falling knives.
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 where the skepticism is well-placed and some better opportunities to consider.
Salesforce (CRM)
One-Month Return: -26.4%
With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce (NYSE:CRM) provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.
Why Do We Think Twice About CRM?
- ARR growth averaged a weak 9.1% over the last year, suggesting that competition is pulling some attention away from its software
- Projected sales growth of 11.8% for the next 12 months suggests sluggish demand
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
At $191.37 per share, Salesforce trades at 4x forward price-to-sales. Read our free research report to see why you should think twice about including CRM in your portfolio.
Encompass Health (EHC)
One-Month Return: +2.4%
With a network of 161 specialized facilities across 37 states and Puerto Rico, Encompass Health (NYSE:EHC) operates inpatient rehabilitation hospitals that help patients recover from strokes, hip fractures, and other debilitating conditions.
Why Are We Hesitant About EHC?
- Muted 5% annual revenue growth over the last five years shows its demand lagged behind its healthcare peers
- Lagging comparable store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
Encompass Health is trading at $105.38 per share, or 17.1x forward P/E. Dive into our free research report to see why there are better opportunities than EHC.
Evolent Health (EVH)
One-Month Return: -29.6%
Founded in 2011 to transform how healthcare is delivered to patients with complex needs, Evolent Health (NYSE:EVH) provides specialty care management services and technology solutions that help health plans and providers deliver better care for patients with complex conditions.
Why Are We Wary of EVH?
- Sales trends were unexciting over the last two years as its 7.1% annual growth was below the typical healthcare company
- Push for growth has led to negative returns on capital, signaling value destruction, and its falling returns suggest its earlier profit pools are drying up
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Evolent Health’s stock price of $2.94 implies a valuation ratio of 12.9x forward P/E. If you’re considering EVH for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
