The past year hasn't been kind to the stocks featured in this article. Each has tumbled to their lowest points in 12 months, leaving investors to decide whether they're witnessing fire sales or falling knives.

While market timing can be an extremely profitable strategy, it has burned many investors and requires rigorous analysis - something we specialize in at StockStory. That said, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.

Rapid7 (RPD)

One-Month Return: -5.6%

Founded in 2000 with the idea that network security comes before endpoint security, Rapid7 (NASDAQ:RPD) provides software as a service that helps companies understand where they are exposed to cyber security risks, quickly detect breaches and respond to them.

Why Do We Pass on RPD?

1. Offerings struggled to generate meaningful interest as its average billings growth of 4.6% over the last year did not impress

2. Estimated sales growth of 2% for the next 12 months implies demand will slow from its three-year trend

3. Projected 2.4 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position

At $22.88 per share, Rapid7 trades at 1.7x forward price-to-sales. If you’re considering RPD for your portfolio, see our FREE research report to learn more.

D.R. Horton (DHI)

One-Month Return: -5.2%

One of the largest homebuilding companies in the U.S., D.R. Horton (NYSE:DHI) builds a variety of new construction homes across multiple markets.

Why Does DHI Give Us Pause?

1. Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 19.4% declines over the past two years

2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

D.R. Horton is trading at $118.63 per share, or 9.2x forward P/E. Check out our free in-depth research report to learn more about why DHI doesn’t pass our bar.

Bio-Techne (TECH)

One-Month Return: -4%

With a catalog of hundreds of thousands of specialized biological products used in laboratories worldwide, Bio-Techne (NASDAQ:TECH) develops and manufactures specialized reagents, instruments, and services that help researchers study biological processes and enable diagnostic testing and cell therapy development.

Why Is TECH Not Exciting?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth

2. Subscale operations are evident in its revenue base of $1.21 billion, meaning it has fewer distribution channels than its larger rivals

3. Free cash flow margin shrank by 8.2 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive