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.

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. Keeping that in mind, here are three value stocks climbing an uphill battle and some other investments you should look into instead.

Boyd Gaming (BYD)

Forward P/E Ratio: 10.7x

Run by the Boyd family, Boyd Gaming (NYSE:BYD) is a diversified operator of gaming entertainment properties across the United States, offering casino games, hotel accommodations, and dining.

Why Does BYD Worry Us?

1. Lackluster 4.1% annual revenue growth over the last two years indicates the company is losing ground to competitors
2. Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
3. ROIC of 13.8% reflects management’s challenges in identifying attractive investment opportunities

At $68.88 per share, Boyd Gaming trades at 10.7x forward price-to-earnings. Read our free research report to see why you should think twice about including BYD in your portfolio, it’s free.

AMN Healthcare Services (AMN)

Forward P/E Ratio: 12.6x

With a network of thousands of healthcare professionals ranging from nurses to physicians to executives, AMN Healthcare (NYSE:AMN) provides healthcare workforce solutions including temporary staffing, permanent placement, and technology platforms for hospitals and healthcare facilities across the United States.

Why Do We Steer Clear of AMN?

1. Declining travelers on assignment over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
2. Forecasted revenue decline of 11.7% for the upcoming 12 months implies demand will fall even further
3. Diminishing returns on capital suggest its earlier profit pools are drying up

AMN Healthcare Services’s stock price of $19.19 implies a valuation ratio of 12.6x forward price-to-earnings. To fully understand why you should be careful with AMN, check out our full research report (it’s free).

Avnet (AVT)

Forward P/E Ratio: 10.4x

With a century-long history of adapting to technological evolution, Avnet (NASDAQ:AVT) is a global electronic components distributor that connects manufacturers of semiconductors and other electronic parts with businesses that need these components.

Why Do We Think Twice About AVT?

1. Sales tumbled by 7.6% annually over the last two years, showing market trends are working against its favor during this cycle
2. Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
3. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

Avnet is trading at $51.94 per share, or 10.4x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than AVT.

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 6 Stocks for this week. 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 Axon (+711% five-year return). Find your next big winner with StockStory today for free.