The stock market is encountering a rough patch despite strength in broader indices. There has been profound underperformance in small caps, mid-caps, and growth stocks.

If the selling accelerates, some of these stocks could likely see another major leg down. Overvalued stocks will also be vulnerable as they are less likely to have buyers on the way down.

Microvast (MVST), Globalstar (GSAT), and State Auto Financial Corporation (STFC) are three stocks Wall Street analysts believe will fall 40% or more. Below, we provide a look at these three publicly traded companies to determine if they are actually overpriced.

MVST

MVST is a tech business that specializes in designing, developing, and making solutions powered by lithium-ion batteries. Based in Houston, MVST previously conducted business as Tuscan Holdings Corporation.

MVST has a D POWR Rating grade. The stock has Ds in the Quality, Value, and Sentiment components of the POWR Ratings. You can learn more about MVST’s individual POWR Rating component grades by clicking here.

Out of 91 stocks in the Industrial – Equipment sector, MVST is ranked 79th. Click here to find out more about the stocks in this sector.

MVST fell nearly 10% in trading today following its admission that quarterly losses were significantly worse than anticipated compared to the numbers from the same period in the prior year. The chip shortage along with shipping delays are clearly taking a chunk out of MVST’s bottom line.

GSAT

GSAT provides satellite data and voice services to both recreational and commercial customers across 120 nations. The company’s products include fixed satellite and mobile phones, satellite data modems, and cellular/landline service to remote areas. Examples of GSAT customers include business in the oil/gas, mining, government, transportation, forestry, heavy construction and commercial fishing industries.

GSAT has a D POWR Rating grade. The stock has C grades in the Growth, Stability, Sentiment and Quality components. You can find out how GSAT fares in the Value and Momentum components by clicking here.

Out of the 23 stocks in the Telecom – Domestic sector, GSAT is ranked 19th. Click here to find out more about the stocks in this space.

GSAT dropped nearly 10% in a single day this past May after releasing disappointing first-quarter earnings. The company hit its earnings target yet fell short of expectations for revenue.

The top analysts insist GSAT is overpriced. If GSAT reaches the target price of 55 cents, it will have declined by more than 60%.

STFC

STFC is an insurance business. STFC’s subsidiaries mainly sell casualty and property insurance for homeowners and automobile owners. STFC also has exposure to potential claims in the area of commercial multi-peril workers’ compensation.

STFC is currently trading at $50. The stock has a 52-week high of $51.51. STFC’s 52-week low is $12.07.

STFC has a C POWR Rating grade. The stock has an F Growth component grade along with Ds in the Sentiment and Value components. You can find out more about STFC’s POWR Rating component grades by clicking here.

STFC is ranked 47th out of 55 stocks in the Insurance – Property & Casualty segment. Investors who are interested in finding out more about the stocks that make up this sector can do so by clicking here.

The analysts have boosted STFC’s average target price by a whopping $32.67 in the past 161 days. This is a significant increase, considering the fact that the stock trades at $50 on the nose. The bottom line is STFC might have ascended too high too quickly.

STFC recently announced it will be acquired by a larger competitor. Liberty Mutual is buying STFC. This news sent STFC’s stock soaring in mid-July. STFC increased nearly 300% in one day. However, profit-taking is just as likely to occur as the euphoria fades. Shorting STFC might be the best play.

MVST shares fell $8.97 (-100.00%) in premarket trading Wednesday. Year-to-date, MVST has declined -44.74%, versus a 19.40% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...

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