Hitting a new 52-week low can be a pivotal moment for any stock. These floors often mark either the beginning of a turnaround story or confirmation that a company faces serious headwinds.
At StockStory, we dig beneath the surface of price movements to uncover whether a company's fundamentals justify its current valuation or suggest hidden potential. Keeping that in mind, here is one stock where you should be greedy instead of fearful and two where the outlook is warranted.
Two Stocks to Sell:
Rapid7 (RPD)
One-Month Return: -3.7%
Founded in 2000 with the idea that network security comes before endpoint security, Rapid7 (NASDAQ:RPD) provides software as a service that helps companies understand where they are exposed to cyber security risks, quickly detect breaches and respond to them.
Why Do We Pass on RPD?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 4.6% underwhelmed
- Estimated sales growth of 2% for the next 12 months implies demand will slow from its three-year trend
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 2.4 percentage points
Rapid7 is trading at $22.66 per share, or 1.7x forward price-to-sales. Dive into our free research report to see why there are better opportunities than RPD.
Wix (WIX)
One-Month Return: -2.6%
Founded in 2006 in Tel Aviv, Wix.com (NASDAQ:WIX) offers a free and easy to operate website building platform.
Why Does WIX Give Us Pause?
- Sales trends were unexciting over the last three years as its 11.5% annual growth was below the typical software company
- High servicing costs result in a relatively inferior gross margin of 68.1% that must be offset through increased usage
Wix’s stock price of $154.33 implies a valuation ratio of 4.6x forward price-to-sales. Read our free research report to see why you should think twice about including WIX in your portfolio.
One Stock to Buy:
Arch Capital Group (ACGL)
One-Month Return: -1.8%
With roots dating back to 1995 and now operating across insurance markets on six continents, Arch Capital Group (NASDAQ:ACGL) provides specialty insurance, reinsurance, and mortgage insurance services worldwide through its three main business segments.
Why Is ACGL a Top Pick?
- Annual net premiums earned growth of 23.3% over the last two years was superb and indicates its market share increased during this cycle
- Share repurchases over the last five years enabled its annual earnings per share growth of 25.9% to outpace its revenue gains
- Impressive 16.2% annual book value per share growth over the last five years indicates it’s building equity value this cycle
At $88.66 per share, Arch Capital Group trades at 1.5x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2024 "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 9 Market-Beating Stocks. 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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