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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.

At StockStory, we dig beneath the surface of price movements to uncover whether a company's fundamentals justify its current valuation or suggest hidden potential. That said, here are three stocks where the skepticism is well-placed and some better opportunities to consider.

Wendy's (WEN)

One-Month Return: -3.2%

Founded by Dave Thomas in 1969, Wendy’s (NASDAQ:WEN) is a renowned fast-food chain known for its fresh, never-frozen beef burgers, flavorful menu options, and commitment to quality.

Why Does WEN Worry Us?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants

2. Projected sales are flat for the next 12 months, implying demand will slow from its six-year trend

3. High net-debt-to-EBITDA ratio of 7× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Wendy's is trading at $12.19 per share, or 12.1x forward P/E. Check out our free in-depth research report to learn more about why WEN doesn’t pass our bar.

Bally's (BALY)

One-Month Return: -32.4%

Headquartered in Providence, Rhode Island, Bally's Corporation (NYSE:BALY) is a diversified global casino-entertainment company that owns and manages casinos, resorts, and online gaming platforms.

Why Are We Out on BALY?

1. Annual revenue growth of 2.9% over the last two years was below our standards for the consumer discretionary sector

2. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

Bally’s stock price of $11.17 implies a valuation ratio of 2.1x forward EV-to-EBITDA. To fully understand why you should be careful with BALY, check out our full research report (it’s free).

Plug Power (PLUG)

One-Month Return: -3.7%

Powering forklifts for Walmart’s distribution centers, Plug Power (NASDAQ:PLUG) provides hydrogen fuel cells used to power electric motors.

Why Do We Steer Clear of PLUG?

1. Annual sales declines of 8.7% for the past two years show its products and services struggled to connect with the market during this cycle

2. Free cash flow margin shrank by 531.2 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution