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Value investing has created more billionaires than any other strategy, like Warren Buffett, who built his fortune by purchasing wonderful businesses at reasonable prices. But these hidden gems are few and far between - many stocks that appear cheap often stay that way because they face structural issues.

Identifying genuine bargains from value traps is something many investors struggle with, which is why we started StockStory - to help you find the best companies. Keeping that in mind, here are three value stocks with little support and some other investments you should consider instead.

Match Group (MTCH)

Forward EV/EBITDA Ratio: 6.4x

Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ:MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.

Why Are We Hesitant About MTCH?

1. Struggled with new customer acquisition as its payers averaged 4.5% declines

2. Estimated sales decline of 1.3% for the next 12 months implies a challenging demand environment

3. 2.6 percentage point decline in its free cash flow margin over the last few years reflects the company’s increased investments to defend its market position

At $30.07 per share, Match Group trades at 6.4x forward EV-to-EBITDA. To fully understand why you should be careful with MTCH, check out our full research report (it’s free).

Cars.com (CARS)

Forward EV/EBITDA Ratio: 3.6x

Originally started as a joint venture between several media companies including The Washington Post and The New York Times, Cars.com (NYSE:CARS) is a digital marketplace that connects new and used car buyers and sellers.

Why Does CARS Give Us Pause?

1. Increasing competition is redirecting attention to other platforms as it failed to grow its dealer customers over the last two years

2. Estimated sales growth of 2.9% for the next 12 months implies demand will slow from its three-year trend

3. Performance over the past three years shows its incremental sales were less profitable as its earnings per share were flat

Cars.com is trading at $11.31 per share, or 3.6x forward EV-to-EBITDA. If you’re considering CARS for your portfolio, see our FREE research report to learn more.

Incyte (INCY)

Forward P/E Ratio: 10.1x

Founded in 1991 and evolving from a genomics research firm to a commercial-stage drug developer, Incyte (NASDAQ:INCY) is a biopharmaceutical company that discovers, develops, and commercializes proprietary therapeutics for cancer and inflammatory diseases.

Why Does INCY Fall Short?

1. Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 14.5 percentage points

2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 18.4 percentage points

3. Eroding returns on capital suggest its historical profit centers are aging