Rock-bottom prices don't always mean rock-bottom businesses. The stocks we're examining today have all touched their 52-week lows, creating a classic investor's dilemma: bargain opportunity or value trap?

Price charts only tell part of the story. Our team at StockStory evaluates each company's underlying fundamentals to separate temporary setbacks from structural declines. Keeping that in mind, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.

Teradyne (TER)

One-Month Return: -30.9%

Sporting most major chip manufacturers as its customers, Teradyne (NASDAQ:TER) is a US-based supplier of automated test equipment for semiconductors as well as other technologies and devices.

Why Does TER Worry Us?

1. Sales tumbled by 5.5% annually over the last two years, showing market trends are working against its favor during this cycle
2. Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 8.7 percentage points
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 5.1 percentage points

Teradyne’s stock price of $72.50 implies a valuation ratio of 18.9x forward price-to-earnings. To fully understand why you should be careful with TER, check out our full research report (it’s free).

Viatris (VTRS)

One-Month Return: -26.2%

Created through the 2020 merger of Mylan and Pfizer's Upjohn division, Viatris (NASDAQ:VTRS) is a healthcare company that develops, manufactures, and distributes branded and generic medicines across more than 165 countries worldwide.

Why Should You Sell VTRS?

1. Annual sales declines of 4.8% for the past two years show its products and services struggled to connect with the market during this cycle
2. Forecasted revenue decline of 6.4% for the upcoming 12 months implies demand will fall even further
3. Issuance of new shares over the last five years caused its earnings per share to fall by 9.6% annually while its revenue grew

Viatris is trading at $7.01 per share, or 3x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than VTRS.

Exponent (EXPO)

One-Month Return: -7.3%

With a team of over 800 consultants holding advanced degrees in 90+ technical disciplines, Exponent (NASDAQ:EXPO) is a science and engineering consulting firm that investigates complex problems and provides expert analysis for clients across various industries.

Why Are We Wary of EXPO?

1. Smaller revenue base of $518.5 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
2. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 5.4% annually
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $78.00 per share, Exponent trades at 38.1x forward price-to-earnings. Check out our free in-depth research report to learn more about why EXPO doesn’t pass our bar.

Stocks We Like More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out 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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.