Most consumer discretionary businesses succeed or fail based on the broader economy. Thankfully for the industry, all signs are pointing up as discretionary stocks have gained 12.3% over the past six months, beating the S&P 500’s 10.4% return.
Although these companies have produced results lately, investors must be mindful because many are fads and only a few will stand the test of time. Keeping that in mind, here are three consumer stocks we’re swiping left on.
ThredUp (TDUP)
Market Cap: $881 million
Founded to revolutionize thrifting, ThredUp (NASDAQ:TDUP) is a leading online fashion resale marketplace offering a wide selection of gently-used clothing and accessories.
Why Are We Out on TDUP?
- Sluggish trends in its orders suggest customers aren’t adopting its solutions as quickly as the company hoped
- Suboptimal cost structure is highlighted by its history of operating margin losses
- Cash-burning history makes us doubt the long-term viability of its business model
ThredUp is trading at $7.03 per share, or 53.2x forward EV-to-EBITDA. If you’re considering TDUP for your portfolio, see our FREE research report to learn more.
Harley-Davidson (HOG)
Market Cap: $2.77 billion
Founded in 1903, Harley-Davidson (NYSE:HOG) is an American motorcycle manufacturer known for its heavyweight motorcycles designed for cruising on highways.
Why Is HOG Risky?
- Demand for its offerings was relatively low as its number of motorcycles sold has underwhelmed
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- High net-debt-to-EBITDA ratio of 8× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $23.17 per share, Harley-Davidson trades at 15.6x forward P/E. To fully understand why you should be careful with HOG, check out our full research report (it’s free for active Edge members).
Marcus & Millichap (MMI)
Market Cap: $1.15 billion
Founded in 1971, Marcus & Millichap (NYSE:MMI) specializes in commercial real estate investment sales, financing, research, and advisory services.
Why Should You Dump MMI?
- Lackluster 1.3% annual revenue growth over the last five years indicates the company is losing ground to competitors
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 3% for the last two years
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Marcus & Millichap’s stock price of $29.52 implies a valuation ratio of 58.4x forward P/E. Dive into our free research report to see why there are better opportunities than MMI.
Stocks We Like 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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