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. Keeping that in mind, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.

Paychex (PAYX)

Consensus price target: $114.57 (5.5% implied return)

Once known as the go-to service for small business payroll needs, Paychex (NASDAQ: PAYX) provides payroll processing, HR services, employee benefits administration, and insurance solutions to small and medium-sized businesses.

Why Do We Think Twice About PAYX?

1. Sales trends were unexciting over the last five years as its 9.4% annual growth was well below the typical software company
2. Estimated sales growth of 5.3% for the next 12 months implies demand will slow from its two-year trend
3. Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient

Paychex is trading at $108.61 per share, or 5.6x forward price-to-sales. To fully understand why you should be careful with PAYX, check out our full research report (it’s free).

ZoomInfo (GTM)

Consensus price target: $4.58 (4.6% implied return)

Operating a platform it calls "RevOS" - short for Revenue Operating System - ZoomInfo (NASDAQ: GTM) provides sales, marketing, and recruiting teams with business intelligence and analytics to identify prospects and deliver targeted outreach.

Why Is GTM Risky?

1. Customers had second thoughts about committing to its platform over the last year as its billings plateaued
2. Forecasted revenue decline of 6.2% for the upcoming 12 months implies demand will fall off a cliff
3. Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 49.7 percentage points

ZoomInfo’s stock price of $4.38 implies a valuation ratio of 1.1x forward price-to-sales. Read our free research report to see why you should think twice about including GTM in your portfolio.

Teradata (TDC)

Consensus price target: $33.50 (-2.4% implied return)

Pioneering data warehousing technology in the 1980s before "big data" was a common term, Teradata (NYSE: TDC) provides cloud-based data analytics and AI platforms that help large enterprises integrate, analyze, and leverage their data across multiple environments.

Why Should You Sell TDC?

1. Customers had second thoughts about committing to its platform over the last year as its average billings growth of 3.4% underwhelmed
2. Overall productivity fell over the last year as its plummeting sales were accompanied by a decline in its operating margin
3. Free cash flow margin is forecasted to shrink by 25.3 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors

At $34.33 per share, Teradata trades at 2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than TDC.

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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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.