The low valuation multiples for value stocks provide a margin of safety that growth stocks rarely offer. However, the challenge lies in determining whether these cheap assets are genuinely undervalued or simply on sale due to their potentially deteriorating business models.
Separating the winners from the value traps is a tough challenge, and that’s where StockStory comes in. Our job is to find you high-quality companies that will stand the test of time. Keeping that in mind, here is one value stock with strong fundamentals and two facing an uphill battle.
Two Value Stocks to Sell:
AECOM (ACM)
Forward P/E Ratio: 11.2x
Founded in 1990 when a group of engineers from five companies decided to merge, AECOM (NYSE: ACM) provides various infrastructure consulting services.
Why Does ACM Fall Short?
- Backlog has dropped by 2% on average over the past two years, suggesting it’s losing orders as competition picks up
- Projected sales growth of 4% for the next 12 months suggests sluggish demand
- Free cash flow margin shrank by 3 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
AECOM’s stock price of $68.20 implies a valuation ratio of 11.2x forward P/E. If you’re considering ACM for your portfolio, see our FREE research report to learn more.
HP (HPQ)
Forward P/E Ratio: 8.6x
Born from the legendary Silicon Valley garage startup founded by Bill Hewlett and Dave Packard in 1939, HP (NYSE: HPQ) designs and sells personal computers, printers, and related technology products and services to consumers, businesses, and enterprises worldwide.
Why Do We Steer Clear of HPQ?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.2% annually over the last five years
- Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
- Performance over the past two years shows its incremental sales were less profitable as its earnings per share were flat
HP is trading at $23.57 per share, or 8.6x forward P/E. To fully understand why you should be careful with HPQ, check out our full research report (it’s free).
One Value Stock to Buy:
Corpay (CPAY)
Forward P/E Ratio: 12.4x
Formerly known as FLEETCOR until its 2024 rebrand, Corpay (NYSE: CPAY) provides specialized payment solutions for businesses to manage vehicle expenses, corporate payments, and lodging costs with enhanced control and reporting capabilities.
Why Are We Backing CPAY?
- Impressive 15.4% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Earnings growth has topped the peer group average over the last five years as its EPS has compounded at 15.8% annually
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
At $347.21 per share, Corpay trades at 12.4x forward P/E. 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
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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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
