These 3 Stocks Have Been the Worst Performers in the S&P 500 This Year. Have They Bottomed Out?

While the S&P 500 rebounded 5.5% in the first half of 2025, Deckers Outdoor (-49%), Enphase Energy (-42%), and UnitedHealth Group (-38%) were the index's most significant underperformers. Deckers' decline is attributed to investor concerns over tariffs and trade policies, leading to a lack of forward guidance despite strong FY2025 growth; Enphase suffered from uncertainty surrounding solar tax credits; and UnitedHealth was impacted by rising costs, Department of Justice investigations, and a CEO change. These companies face specific industry and regulatory headwinds that contrast with the broader market's recovery, presenting potential contrarian investment considerations for long-term investors despite their recent struggles.

Analysis

Despite the S&P 500's 5.5% gain in the first half of 2025, a significant divergence exists with the index's worst performers: Deckers Outdoor (DECK), Enphase Energy (ENPH), and UnitedHealth Group (UNH). Deckers, despite posting strong fiscal 2025 results with 16% revenue growth and a 30% increase in diluted EPS, saw its stock fall 49% due to investor concerns over tariffs and trade policies, which prompted the company to withdraw its full-year guidance. Similarly, Enphase Energy's 42% decline stems from uncertainty surrounding solar tax credits, overshadowing its robust 35% year-over-year revenue growth in Q1 and its strong balance sheet holding over $1.5 billion in cash. UnitedHealth Group plummeted 38%, facing a confluence of negative catalysts including rising costs, a Department of Justice investigation into its billing practices, a recent earnings miss, and a CEO change. While these headwinds have been severe, the company remains highly profitable, generating over $22 billion in earnings on $410 billion in revenue over the last four quarters and now trades at a low forward P/E multiple of 13. For all three companies, the market is pricing in significant external, regulatory, and operational risks over their reported fundamental performance.

Key Decisions for Investors

• Investors with a long-term horizon should consider these deep underperformers as potential contrarian opportunities, recognizing that further downside is possible and patience will be required.
• For Deckers and Enphase, the key decision is whether their strong underlying growth and discounted valuations provide a sufficient margin of safety against specific, but uncertain, regulatory and trade policy headwinds.
• Investors interested in UnitedHealth should weigh the attractive 13x forward P/E multiple and 2.9% dividend yield against the significant risks from regulatory probes and operational cost pressures.
• Given the stated risk that these stocks may not have bottomed, a strategy of scaling into positions over time could be prudent to mitigate volatility and average down the cost basis.