3 Unpopular Stocks We Find Risky

Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.

At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. That said, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.

Huntington Ingalls (HII)

Consensus Price Target: $331.89 (4.1% implied return)

Building Nimitz-class aircraft carriers used in active service, Huntington Ingalls (NYSE:HII) develops marine vessels and their mission systems and maintenance services.

Why Should You Sell HII?

1. Backlog growth averaged a weak 4.9% over the past two years, suggesting it may need to tweak its product roadmap or go-to-market strategy
2. Earnings per share fell by 1.1% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

At $318.92 per share, Huntington Ingalls trades at 19.1x forward P/E. Read our free research report to see why you should think twice about including HII in your portfolio.

American Airlines (AAL)

Consensus Price Target: $15.16 (5.7% implied return)

One of the ‘Big Four’ airlines in the US, American Airlines (NASDAQ:AAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.

Why Do We Avoid AAL?

1. Demand for its offerings was relatively low as its number of revenue passenger miles has underwhelmed
2. Free cash flow margin is projected to show no improvement next year
3. 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

American Airlines’s stock price of $14.34 implies a valuation ratio of 8.6x forward P/E. Dive into our free research report to see why there are better opportunities than AAL.

Inspire Medical Systems (INSP)

Consensus Price Target: $123.07 (-13.4% implied return)

Offering an alternative for the millions who struggle with traditional CPAP machines, Inspire Medical Systems (NYSE:INSP) develops and sells an implantable neurostimulation device that treats obstructive sleep apnea by stimulating nerves to keep airways open during sleep.

Why Is INSP Not Exciting?

1. Subscale operations are evident in its revenue base of $882.6 million, meaning it has fewer distribution channels than its larger rivals
2. Poor free cash flow margin of 3.7% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
3. Negative returns on capital show management lost money while trying to expand the business

Inspire Medical Systems is trading at $142.16 per share, or 82.2x forward P/E. To fully understand why you should be careful with INSP, check out our full research report (it’s free for active Edge members).

Stocks We Like More

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 5 Growth Stocks for this month. 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

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