January 10, 2026
Every successful investor knows a painful truth: knowing when to sell is often more critical than knowing what to buy.
While financial media overwhelmingly focuses on buying opportunities, our research consistently identifies companies facing significant headwinds that merit serious consideration for selling. These aren’t just stocks underperforming the market; they’re businesses confronting structural challenges, deteriorating fundamentals, or carrying valuations disconnected from financial reality.
What you won’t find here: reactionary calls based on short-term price movements or headline volatility. Each company on this list has been thoroughly analyzed across multiple metrics that historically precede substantial declines.
Smart investors understand that portfolio management requires both addition and subtraction. Sometimes the best investment decision is to redeploy capital away from troubling positions before problems fully materialize in the share price.
This week’s watchlist highlights stocks showing critical weaknesses that demand immediate attention:
UniFirst (UNF)
UniFirst demonstrates how investment spending can destroy near-term profitability even when revenue growth appears healthy, with the workplace uniform and protective equipment specialist posting a 3% revenue increase to just over $621 million in its first quarter of fiscal 2026 while net income collapsed 20% to $34.4 million or $1.89 per share. The company beat analyst revenue expectations of slightly under $620 million, yet missed earnings estimates calling for $2.10 per share, triggering a 3% stock decline as investors recognized that management’s investments during the quarter consumed profits without delivering obvious improvements to competitive positioning or growth trajectory. While management attributed revenue gains to new customer additions and improved retention of existing clientele, these positive operational metrics proved insufficient to offset the profitability impact of capital deployments that may or may not generate adequate returns over time.
The full-year guidance reaffirmation reveals deeper concerns about UniFirst’s profit trajectory, with the company maintaining its fiscal 2026 outlook calling for revenue between just under $2.48 billion and almost $2.5 billion alongside per-share GAAP earnings anticipated between $6.58 and $6.98. Comparing these projections against fiscal 2025 results of $2.43 billion in revenue and $7.98 per share in earnings exposes a troubling dynamic where management projects modest revenue growth accompanied by notable earnings decline, suggesting the investment spending pressuring current profitability will continue throughout the year while failing to drive sufficient top-line acceleration to offset margin compression. The 30.72% gross margin provides some cushion but appears inadequate to absorb ongoing investment spending while maintaining the earnings power that historically supported the stock’s valuation.
Trading at around $203 per share with a market capitalization of approximately $3.5 billion and offering a modest 0.70% dividend yield, UniFirst carries a valuation appropriate for a steady grower in mature markets yet faces a fiscal year where profitability declines despite revenue growth, creating an unappealing risk-reward profile. The stock’s 52-week range of $147.66 to $232.14 illustrates how dramatically sentiment has shifted as investors reassess whether UniFirst’s business model can sustain historical profitability levels while navigating increased competition and making investments necessary to retain customers in workplace services markets. The combination of 20% earnings decline in the most recent quarter, full-year guidance projecting further profit deterioration despite revenue growth, and limited visibility into when investment spending will translate into improved competitive positioning creates a situation where investors face extended uncertainty about earnings power. For those seeking stable, mature business exposure, UniFirst represents a disappointing proposition where management’s capital allocation decisions prioritize uncertain future returns over near-term shareholder value, with little reason to expect sudden demand surges that would justify investing in a stock whose profitability trajectory points decidedly downward for the foreseeable future.
Globalstar (GSAT)
Globalstar confronts existential competitive threats from SpaceX’s Starlink satellite network that possesses overwhelming advantages in scale, deployment velocity, brand recognition, and capital resources that could render Globalstar’s two dozen satellites irrelevant despite the company’s Apple contract providing emergency SOS text services. The stock surrendered a 5% gain following Clear Street’s price target increase to $71, plummeting 9.6% after Scotiabank highlighted the vast disparity in capabilities between satellite communications providers and SpaceX’s Starlink system, which deploys new satellites—many equipped for direct-to-cell service—at rates exceeding 3,000 annually. This deployment pace dwarfs not only AST SpaceMobile’s mere six satellites in orbit but also Globalstar’s modest constellation of approximately two dozen satellites, creating a competitive dynamic where SpaceX adds more satellites monthly than Globalstar operates in total.
The competitive disadvantage extends beyond satellite count to include what Scotiabank analyst Coello characterized as the “global brand recognition” of SpaceX’s Starlink system that neither AST SpaceMobile nor Globalstar possess, allowing SpaceX to capitalize on rapid satellite deployment through superior customer acquisition and pricing power that smaller competitors cannot match. Coello described SpaceX and Starlink as “unstoppable,” with this competitive dominance potentially accelerating further following SpaceX’s planned $1.5 trillion IPO later this year that would flood the company with capital enabling even faster business expansion while competitors struggle with limited resources. The fundamental question facing Globalstar investors involves whether a company that has earned full-year profit only once in the past decade and isn’t expected to turn profitable again until 2027 can possibly compete against Elon Musk’s well-funded satellite juggernaut.
Trading at around $60 per share with a market capitalization of approximately $7.6 billion, Globalstar carries a valuation assuming its Apple contract provides sustainable competitive moats despite SpaceX’s overwhelming advantages potentially making that partnership irrelevant if Starlink achieves ubiquitous direct-to-cell coverage rendering emergency SOS services unnecessary. The stock’s 52-week range of $17.24 to $74.88 illustrates the extreme volatility characterizing a company whose valuation depends entirely on maintaining its Apple relationship while facing competitors deploying satellites at rates that could saturate the market within years. The 31.29% gross margin demonstrates reasonable unit economics when Globalstar successfully sells services, yet these margins prove insufficient to generate consistent profitability as evidenced by the company’s decade-long history of losses with only a single profitable year. For investors seeking satellite communications exposure, Globalstar represents a precarious bet that a company with two dozen satellites, persistent unprofitability, and dependence on a single major customer can survive against SpaceX deploying thousands of satellites annually while possessing global brand recognition, unlimited capital following its planned IPO, and technical capabilities that may render Globalstar’s entire value proposition obsolete before the company achieves sustained profitability.
First Solar (FSLR)
First Solar exemplifies how deteriorating bookings trends and reduced government support can undermine solar companies even when gross margins appear healthy, with shares plummeting over 10% following Jefferies analyst Julian Dumoulin-Smith’s downgrade to hold from buy alongside a reduced price target of $260 per share from $269. The analyst expressed concerns that management will fail to improve bookings, a critical business driver, pointing to repeated guidance reductions throughout the previous year driven substantially by debookings where customers cancelled projects after initially committing. This pattern of project cancellations represents more than temporary volatility, suggesting either deteriorating confidence in solar economics, increased competition making First Solar’s offerings less attractive relative to alternatives, or broader industry headwinds that prevent converting initial customer interest into completed installations.
The regulatory environment compounds these operational challenges following passage of the U.S. government’s Big, Beautiful Bill that Dumoulin-Smith noted provided limited top-down support for alternative energy solutions despite not entirely eliminating advantages that solar companies previously enjoyed. This policy shift creates uncertainty about future project economics as customers reassess whether solar installations remain financially attractive with reduced government incentives, potentially driving additional debookings as existing commitments prove uneconomical under new subsidy structures. The already-struggling solar industry faces intensifying pressure from this legislative change, with reduced government support arriving precisely when widespread consumer concerns about the economy already pressure discretionary capital expenditures like solar panel installations.
Trading at around $239 per share with a market capitalization of approximately $26 billion, First Solar maintains a 40.32% gross margin that would typically suggest healthy underlying profitability, yet this manufacturing efficiency cannot protect against revenue volatility driven by persistent debookings that prevent the company from converting pipeline into realized sales. The stock’s 52-week range of $116.56 to $285.99 illustrates how dramatically sentiment can shift in solar stocks where government policy changes and project cancellation trends create binary outcomes for companies dependent on consistent bookings to utilize manufacturing capacity. The combination of management lowering guidance multiple times driven by customer project cancellations, analyst concerns that bookings will fail to improve, reduced government support following legislative changes, and consumer economic worries dampening appetite for major capital expenditures creates a situation where First Solar faces sustained headwinds that gross margin strength cannot overcome. For investors seeking renewable energy exposure, First Solar represents a cautionary tale about companies where policy dependence and booking volatility create unpredictable revenue streams, with the recent trend of debookings appearing to represent a lasting phenomenon rather than temporary disruption given the reduced government support and economic concerns likely to persist throughout the year.
