1 Value Stock Suitable for Long-Term Investors and 2 We Overlook

Understanding Value Stocks: Safety and Pitfalls

Value stocks often trade at lower valuation multiples, offering investors a cushion against risk that growth stocks seldom provide. The real challenge, however, is distinguishing between assets that are genuinely undervalued and those that appear cheap due to underlying business weaknesses.

Even experienced investors can struggle to separate true bargains from potential value traps. That’s why StockStory exists—to guide you toward outstanding companies. With this in mind, we highlight one value stock with solid fundamentals and two facing significant challenges.

Value Stocks to Consider Selling

Wendy's (WEN)

Forward P/E Ratio: 12.9x

Wendy’s (NASDAQ:WEN), established by Dave Thomas in 1969, is a well-known fast-food brand recognized for its fresh beef burgers and dedication to quality.

Reasons to Reconsider Holding WEN:

• Same-store sales have been sluggish for the past two years, indicating limited expansion opportunities in its primary markets.
• Projected sales growth of just 1.2% over the next year suggests waning demand compared to its six-year average.
• The company’s high net-debt-to-EBITDA ratio of 7× raises concerns about possible asset sales or dilutive financing if performance falters.

Wendy’s shares are priced at $7.72, reflecting a forward P/E of 12.9x.

Brinker International (EAT)

Forward P/E Ratio: 12.8x

Brinker International (NYSE:EAT), founded by Norman Brinker in Dallas, operates popular restaurant chains including Chili’s, Maggiano’s Little Italy, and It’s Just Wings.

Concerns About EAT:

• Growth is limited by a lack of new restaurant openings, with the company focusing on maximizing sales at existing locations.
• Expected sales growth of 4.1% over the next year signals a slowdown from its historical trend.
• Supply chain difficulties and unfavorable unit economics contribute to a modest gross margin of 17.7%.

Brinker International trades at $151.53 per share, with a forward P/E of 12.8x.

Value Stock Worth Watching

Expedia (EXPE)

Forward EV/EBITDA Ratio: 6.8x

Expedia (NASDAQ:EXPE), originally launched as a Microsoft division, has grown into a leading global online travel agency.

Why Expedia Stands Out:

• Its platform is difficult to duplicate at scale, resulting in an impressive gross margin of 89.8%.
• Expedia boasts a strong EBITDA margin of 22.6%, demonstrating operational efficiency and benefiting from fixed cost leverage.
• Share buybacks over the past three years have accelerated earnings per share growth beyond revenue increases.

Expedia is currently priced at $214.12 per share, trading at 6.8x forward EV/EBITDA.

Top Stocks for Any Market Environment

Building a portfolio based on outdated trends can be risky, especially as crowded stocks become increasingly volatile.

The next generation of high-growth companies can be found in our Top 9 Market-Beating Stocks. This curated selection features High Quality stocks that have delivered a remarkable 244% return over the past five years (as of June 30, 2025).

Our 2020 picks include household names like Nvidia, which soared by 1,326% between June 2020 and June 2025, as well as lesser-known companies such as Exlservice, which achieved a 354% five-year return. Let StockStory help you find your next standout investment.