Hitting a new 52-week low can be a pivotal moment for any stock. These floors often mark either the beginning of a turnaround story or confirmation that a company faces serious headwinds.
While market timing can be an extremely profitable strategy, it has burned many investors and requires rigorous analysis - something we specialize in at StockStory. Keeping that in mind, here is one stock where the poor sentiment is creating a buying opportunity and two where the outlook is warranted.
Two Stocks to Sell:
SoundHound AI (SOUN)
One-Month Return: -9.7%
Born from the idea that machines should understand human speech as naturally as people do, SoundHound AI (NASDAQ: SOUN) develops voice recognition and conversational intelligence technology that enables businesses to integrate voice assistants into their products and services.
Why Are We Cautious About SOUN?
- Bad unit economics and steep infrastructure costs are reflected in its gross margin of 42.4%, one of the worst among software companies
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
- Negative free cash flow raises questions about the return timeline for its investments
SoundHound AI’s stock price of $8.97 implies a valuation ratio of 15.9x forward price-to-sales. Check out our free in-depth research report to learn more about why SOUN doesn’t pass our bar.
Masimo (MASI)
One-Month Return: +27%
Founded in 1989 to solve the "unsolvable problem" of accurate pulse oximetry during patient movement, Masimo (NASDAQ: MASI) develops and manufactures noninvasive patient monitoring technologies, including its breakthrough pulse oximetry systems that accurately measure blood oxygen levels even during patient movement.
Why Are We Wary of MASI?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 16.3% annually over the last two years
- Smaller revenue base of $1.48 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Masimo is trading at $175.23 per share, or 30.5x forward P/E. Read our free research report to see why you should think twice about including MASI in your portfolio.
One Stock to Buy:
Insulet (PODD)
One-Month Return: -4.8%
Revolutionizing diabetes care with its tubeless "Pod" technology, Insulet (NASDAQ: PODD) develops and manufactures innovative insulin delivery systems for people with diabetes, primarily through its Omnipod product line.
Why Do We Love PODD?
- Average constant currency growth of 25.9% over the past two years demonstrates its ability to grow internationally despite currency fluctuations
- Free cash flow margin jumped by 30.1 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Improving returns on capital reflect management’s ability to monetize investments
At $252.17 per share, Insulet trades at 39.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
