November 26, 2025
When it comes to investing, knowing when to sell is just as important as knowing what to buy. While most financial coverage focuses on buying opportunities, our research team has identified several companies facing significant challenges that investors should consider selling.
These stocks aren’t simply underperforming the market temporarily – they’re facing fundamental business problems, weakening financials, or carrying valuations that don’t match their current reality.
Our analysis isn’t based on short-term price movements or headline reactions. Each company has been thoroughly evaluated using multiple indicators that historically precede major stock declines.
Here are three stocks showing critical warning signs that demand your immediate attention:
Opendoor Technologies (OPEN)
Opendoor Technologies shows how business models predicated on housing market liquidity can face existential threats when that liquidity evaporates, with shares plummeting 11% Wednesday and collapsing nearly 30% over the past week as data from Redfin confirmed the housing market has plateaued with sales and listings showing little change from prior months.
The digital real estate disruptor’s core business model requires continuous inventory turnover, yet Redfin’s report creates a nightmare scenario:
- “Housing-market activity is plateauing as Americans grapple with high costs and economic uncertainty”
- Characterized this “past year has been especially stagnant”
- Opendoor must sit on billions in housing inventory while carrying costs accumulate
- Tie up capital that cannot be redeployed
This inventory buildup directly hammers both revenue and profitability as homes languish unsold, with extended holding periods increasing operating expenses through property taxes, maintenance, insurance, and financing costs on the debt used to acquire inventory.
The company’s catastrophic 8.01% gross margin reveals a business model with virtually no cushion against market slowdowns:
- Even minor increases in holding periods or modest price concessions can instantly transform slim profits into substantial losses
- Margin structure proves entirely unsuitable for a company in a cyclical industry
- Inventory turnover depends on variables beyond management control
- Interest rates, consumer confidence, employment conditions, and broader economic sentiment—all have deteriorated
Opendoor’s heavy reliance on debt to finance housing inventory acquisitions compounds these vulnerabilities, as extended holding periods require servicing debt obligations on assets that generate no revenue while consuming cash through carrying costs.
Trading at $6.75 per share with a market cap of approximately $6.4 billion, Opendoor maintains a valuation that assumes eventual housing market recovery and validation of its digital disruption model, yet the economics remain fundamentally unproven even during favorable market conditions.
The company continues operating at a loss despite years of attempting to demonstrate unit economics that could eventually produce sustainable profitability. The stock’s 52-week range of $0.51 to $10.87 shows the extreme volatility inherent in a business whose fortunes fluctuate wildly with housing market sentiment.
Eversource Energy (ES)
Eversource Energy shows how regulatory setbacks can destroy carefully crafted strategic plans, with the regional New England utility plummeting nearly 12% for the week following Connecticut regulators’ rejection of its proposed $2.4 billion sale of water utility unit Aquarion to the quasi-public Aquarion Water Authority.
The Public Utilities Regulatory Authority’s decision Wednesday represented a devastating blow:
- Rejection came despite 2024 legislation specifically designed to facilitate the transaction
- PURA commissioner Holly Cheeseman stated that while proposal met standards in numerous areas, “with regard to the areas of managerial responsibility and suitability, the application failed”
- Suggests regulatory hurdles for similar future attempts may prove insurmountable
The failed sale faced substantial political opposition from both Democrat and Republican lawmakers concerned about potential harmful financial impacts on customers, showing how public utility divestitures attract scrutiny that extends far beyond typical corporate transactions.
Eversource’s response acknowledged the regulatory challenge:
- “The special act approved by legislators in 2024 indicated that the state was interested in an expanded non-profit model”
- “However, once tested, that same special act proved difficult to overcome for PURA to move away from an investor-owned model”
- Reveals management’s miscalculation in assuming legislative authorization would translate to regulatory approval
Trading at around $65 per share with a market cap of approximately $24 billion and offering a 4.60% dividend yield, Eversource now finds itself trapped between competing pressures:
- Continues grappling with organizational sprawl across electric, natural gas, and water utilities
- Carrying high long-term debt levels that Aquarion sale was intended to reduce
- Regulatory rejection eliminates most obvious source of deleveraging capital
The 30.41% gross margin provides some operational cushion, but regulated utilities face limited pricing flexibility and must navigate complex political and regulatory environments.
Life360 (LIFE)
Life360 faces fundamental business model vulnerabilities that short-seller Katamaran Capital believes could drive 40% downside from current levels, with the location-sharing app’s nearly $6 billion market cap built on what founder and chief investment officer Priya Kodeeswaran describes as “monetizing anxiety” among attentive parents with school-age children.
The company, which debuted publicly in Australia in 2019 before launching a dual Nasdaq listing in 2024, has seen impressive share price returns that Kodeeswaran characterized as a “stonker,” yet this performance appears increasingly divorced from underlying business fundamentals.
The subscription approach that drives Life360’s revenue carries dangerous concentration risk:
- Business heavily dependent on its mostly U.S.-based paying subscribers
- Conversion rates among international users remain disappointingly low
- Geographic revenue concentration creates vulnerability to U.S.-specific economic weakness
- Inability to convert international users suggests product lacks compelling value propositions in markets outside core geography
More critically, the company faces existential competitive threats:
- Free location-tracking features now embedded in both Google and Apple operating systems
- Reach billions of users globally
- Require no separate app download, subscription payment, or behavior change to activate
The fundamental challenge facing Life360 stems from competing against features that major technology platforms provide at zero marginal cost as part of broader ecosystem strategies. Google and Apple can subsidize location-sharing functionality indefinitely while Life360 must extract subscription revenue to justify its standalone business model and valuation.
According to Kodeeswaran’s analysis, “the business model risk is actually increasing” as these free alternatives gain awareness and adoption, gradually eroding Life360’s differentiation and pricing power.
The company’s near-$6 billion market cap assumes sustained subscription growth and international expansion success, yet both pillars appear threatened by structural forces beyond management’s control—free competitor offerings that match core functionality and geographic markets resistant to paid conversion.