Value investing has produced some of the world’s most famous investing billionaires, including Warren Buffett, David Einhorn, and Seth Klarman, who built their fortunes by purchasing wonderful businesses at reasonable prices. But these hidden gems are few and far between - many stocks that appear cheap often stay that way because they face structural issues.
This distinction between true value and value traps can challenge even the most skilled investors. Luckily for you, we started StockStory to help you uncover exceptional companies. That said, here is one value stock trading at a big discount to its intrinsic value and two with little support.
Two Value Stocks to Sell:
Xponential Fitness (XPOF)
Forward P/E Ratio: 12.7x
Owner of CycleBar, Rumble, and Club Pilates, Xponential Fitness (NYSE: XPOF) is a boutique fitness brand offering diverse and specialized exercise experiences.
Why Should You Dump XPOF?
- Sales trends were unexciting over the last two years as its 2.5% annual growth was below the typical consumer discretionary company
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Xponential Fitness’s stock price of $7.76 implies a valuation ratio of 12.7x forward P/E. To fully understand why you should be careful with XPOF, check out our full research report (it’s free).
Cushman & Wakefield (CWK)
Forward P/E Ratio: 11.9x
With expertise in the commercial real estate sector, Cushman & Wakefield (NYSE: CWK) is a global Chicago-based real estate firm offering a comprehensive range of services to clients.
Why Do We Pass on CWK?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 4.1% over the last five years was below our standards for the consumer discretionary sector
- Poor free cash flow margin of 2.2% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Cushman & Wakefield is trading at $16.42 per share, or 11.9x forward P/E. Dive into our free research report to see why there are better opportunities than CWK.
One Value Stock to Buy:
Super Micro (SMCI)
Forward P/E Ratio: 13.8x
Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ: SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Why Are We Backing SMCI?
- Annual revenue growth of 68.8% over the past two years was outstanding, reflecting market share gains this cycle
- Dominant market position is represented by its $21.05 billion in revenue and gives it fixed cost leverage when sales grow
- Free cash flow profile has moved into positive territory over the last five years, showing the company is at an important crossroads
At $30.81 per share, Super Micro trades at 13.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even 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 5 Strong Momentum 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.
