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.

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 three stocks where the outlook is warranted and some alternatives with better fundamentals.

Home Depot (HD)

Consensus Price Target: $392.91 (3.5% implied return)

Founded and headquartered in Atlanta, Georgia, Home Depot (NYSE: HD) is a home improvement retailer that sells everything from tools to building materials to appliances.

Why Does HD Give Us Pause?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Gross margin of 33.4% is an output of its commoditized inventory
3. Incremental sales over the last three years were much less profitable as its earnings per share fell by 3.3% annually while its revenue grew

At $379.56 per share, Home Depot trades at 25.3x forward P/E. Check out our free in-depth research report to learn more about why HD doesn’t pass our bar.

Macy's (M)

Consensus Price Target: $21.90 (1.2% implied return)

With a storied history that began with its 1858 founding, Macy’s (NYSE: M) is a department store chain that sells clothing, cosmetics, accessories, and home goods.

Why Do We Think M Will Underperform?

1. Recent store closures and weak same-store sales point to soft demand and an operational restructuring
2. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
3. Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term

Macy's is trading at $21.64 per share, or 9.8x forward P/E. If you’re considering M for your portfolio, see our FREE research report to learn more.

PacBio (PACB)

Consensus Price Target: $2.42 (3.9% implied return)

Pioneering what scientists call "HiFi long-read sequencing," recognized as Nature Methods' method of the year for 2022, Pacific Biosciences (NASDAQ: PACB) develops advanced DNA sequencing systems that enable scientists and researchers to analyze genomes with unprecedented accuracy and completeness.

Why Should You Dump PACB?

1. Sales tumbled by 4.5% annually over the last two years, showing market trends are working against its favor during this cycle
2. Long-term business health is up for debate as its cash burn has increased over the last five years
3. Negative earnings profile makes it challenging to secure favorable financing terms from lenders

PacBio’s stock price of $2.33 implies a valuation ratio of 4.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than PACB.

Stocks We Like More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 6 Stocks for this week. 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.