October 29, 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:
Oklo (OKLO)
Oklo shows how speculative exhaustion can trigger brutal reversals even without specific negative news, as the nuclear energy stock plummeted 17.3% this week despite no company announcements or analyst downgrades. The decline accelerated Wednesday following Monday’s revelation that Cathie Wood’s ARK Autonomous Technology & Robotics ETF sold 53,353 shares, signaling institutional recognition that the stock’s 459% year-to-date surge has created unsustainable valuations for a pre-revenue company.
The fundamental problem is that Oklo operates in complete valuation vacuum:
- Zero revenue and no profits
- Traditional metrics provide no framework for assessing the $21 billion market cap
- Stock’s spectacular run appears driven purely by momentum and enthusiasm for nuclear energy’s potential role in powering AI data centers
- Price action completely detached from operational reality
The ARK ETF’s position trim suggests even bullish institutions recognize the disconnect between current valuation and the company’s development timeline.
At $115.33, Oklo trades at a market cap that would be generous for an established nuclear energy company with proven technology and actual revenue, let alone a development-stage business still seeking regulatory approvals and commercial partnerships.
The company’s advanced reactor technology remains “highly unproven” according to analysts, while the path to commercial operations extends years into the future with substantial execution risk at every stage.
The stock’s three-day losing streak this week, combined with extraordinary volatility from a 52-week range of $17.14 to $193.84, reveals the speculative nature of the investment where sentiment shifts can trigger devastating price swings. The absence of fundamental anchors and clear institutional profit-taking suggests exiting before momentum fully reverses.
Progressive (PGR)
Progressive faces a margin compression cycle as dual analyst downgrades this week highlighted growing concerns about weakening pricing power in the insurance industry. Morgan Stanley’s Bob Huang downgraded the stock from equalweight to underweight, slashing his price target from $290 to $265 while projecting per-share earnings declines in both 2026 and 2027.
Barclays’ Alex Scott compounded the negative sentiment by reducing his price target from $271 to $257, though maintaining a neutral stance. The stock dropped nearly 3% Monday despite a 1.1% gain in the S&P 500, reflecting investor recognition that the insurance industry’s pricing tailwinds have reversed.
The fundamental issue undermining Progressive’s investment thesis is the transition from a favorable pricing environment to one where premium increases become increasingly difficult:
- For insurance companies, pricing power directly determines profitability
- Premiums must adequately cover claims costs and operating expenses while generating acceptable returns
- Huang’s specific concern about entering a cycle of weaker pricing power threatens Progressive’s core business model
- Company’s historical success has been predicated on maintaining pricing discipline while growing market share
At $221.06 with a $130 billion market cap, Progressive trades at valuations that assume continued earnings growth despite clear analyst warnings of multi-year EPS declines ahead. The company’s minimal 0.02% dividend yield provides essentially no downside protection.
The recent third-quarter preliminary results failed to meet analyst estimates, suggesting operational challenges are already materializing. The timing is particularly concerning—analyst downgrades based on anticipated earnings declines in 2026-2027 typically precede actual profit deterioration, meaning investors face at least two years of potential disappointment.
AST SpaceMobile (ASTS)
AST SpaceMobile shows the capital starvation spiral that threatens pre-revenue space companies as the satellite broadband provider crashed 14.8% this week following its announcement of $1 billion in convertible notes—upsized from an initial $850 million target—alongside a separate 2 million share equity offering.
The convertible notes, maturing in 2036 with a 2% interest rate and conversion price of $96.30 per share, represent just the latest in an ongoing series of dilutive capital raises required to fund the company’s ambitious 168-satellite constellation.
The fundamental challenge facing AST SpaceMobile is the catastrophic mismatch between capital requirements and revenue generation:
- Gross margin of negative 83,379% and virtually no revenue
- Company burns cash at extraordinary rates while racing to deploy satellite infrastructure
- Estimated to require at least $3 billion in total funding
- Management’s guidance for $50 million to $75 million in revenue in second half of 2025 pales against capital intensity
- Essentially guarantees multiple future dilutive rounds before sustainable operations
At $66.99 with a $21 billion market cap, AST SpaceMobile trades on pure speculation about future market share in direct-to-cell satellite services despite facing formidable competition from Elon Musk’s Starlink.
The company’s convertible notes structure reveals the precariousness of its position:
- Conversion prices only 40% above current trading levels after this week’s decline
- Protection against dilution has already eroded significantly
- Simultaneous announcement of $50 million debt repurchase funded by dilutive equity issuance
- Demonstrates management’s desperation to manage increasingly complex capital structure
The inevitable wave of future dilution required to reach profitability makes current valuations unjustifiable, particularly when even optimistic revenue projections suggest years of massive cash burn ahead.