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. That said, here is one value stock offering a compelling risk-reward profile and two with little support.
Two Value Stocks to Sell:
Domo (DOMO)
Forward P/S Ratio: 0.8x
Named for the Japanese word meaning "thank you very much," Domo (NASDAQ:DOMO) provides a cloud-based business intelligence platform that connects people with real-time data and insights across organizations.
Why Do We Steer Clear of DOMO?
- Offerings struggled to generate interest as its billings were flat over the last year
- Projected sales growth of 1.2% for the next 12 months suggests sluggish demand
- Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
At $6.28 per share, Domo trades at 0.8x forward price-to-sales. Check out our free in-depth research report to learn more about why DOMO doesn’t pass our bar.
Frontdoor (FTDR)
Forward P/E Ratio: 13.8x
Established in 2018 as a spin-off from ServiceMaster Global Holdings, Frontdoor (NASDAQ:FTDR) is a provider of home warranty and service plans.
Why Do We Pass on FTDR?
- Performance surrounding its home service plans has lagged its peers
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
- Free cash flow margin is expected to remain in place over the coming year
Frontdoor is trading at $59.78 per share, or 13.8x forward P/E. If you’re considering FTDR for your portfolio, see our FREE research report to learn more.
One Value Stock to Buy:
NCR Atleos (NATL)
Forward P/E Ratio: 8.6x
Spun off from NCR Voyix in 2023 to focus exclusively on self-service banking technology, NCR Atleos (NYSE:NATL) provides self-directed banking solutions including ATM and interactive teller machine technology, software, services, and a surcharge-free ATM network for financial institutions and retailers.
Why Are We Backing NATL?
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 82% annually, topping its revenue gains
NCR Atleos’s stock price of $39.93 implies a valuation ratio of 8.6x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 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.