3 Stocks Well Below 52-Week Highs Poised for a Q4 Rebound

Written by Gabriel Osorio-Mazilli on October 25, 2025

Technical analysis has numerous applications and uses, but here’s the most important one. Assessing where a stock trades in relation to its 52-week high can serve as a key indicator of the market’s outlook for that company or industry group, and the 20% discount level is one of the most important benchmarks in this analysis. Wall Street refers to this as the difference between a bull and a bear market, and here are three stocks trading well into bear market territory.

MercadoLibre Inc. (NASDAQ: MELI), Rocket Companies Inc. (NYSE: RKT), and On Holding (NYSE: ONON) are now trading under this bear market designation. As these stocks are exposed to the consumer discretionary sector, they may have fallen due to association rather than any company-specific issue. However, in either case, investors need to focus on two main factors moving forward.

The first question is whether they have already factored in the fears of a consumer slowdown due to inflation and tariff concerns. The second question is whether there is sufficient evidence to support a price increase for their business models by the end of the fourth quarter of 2025. Each with a different business model and product/service mix, this approach offers a great way to capture diversified upside potential for a portfolio.

MercadoLibre’s Bottoming Sent Bears Running

Over the past month, 13.8% of MercadoLibre stock’s short interest declined as a potential sign of bearish capitulation, and here’s one reason for short sellers to be tapping out and closing their positions right now. The Latin American E-commerce platform has had a year-to-date performance of 23.6% so far, and that’s enough to create a significant inflection point.

As the company now trades at 79% of its 52-week high, it is close enough to crossing into bullish momentum, but far enough from its yearly highs to give prospective buyers room to take advantage in further upside moves. With this attractive risk-to-reward ratio in mind, investors shouldn’t be surprised to see where Wall Street analysts think MercadoLibre could head next.

The consensus price target remains set at $2,810.88 per share, representing a 33.7% increase from the current stock price. However, there are also some outlier opinions on this. The most recent one, in October 2025, came from Susquehanna’s James Friedman, whose target price was $2,900 per share (although it had been lowered from a previous $2,975).

Here’s a more concrete piece of evidence of MercadoLibre’s rally optimism: Swedbank also took action in October by raising its positions by 11.9%, bringing its total stake to $321.5 million today. At this point, it seems most of the consumer worries have been overpriced due to the stock’s decline, but here’s why Q4 will be key for MercadoLibre.

The MarketBeat consensus is set at $13.79 in earnings per share (EPS), which would show a jump of 34% from today’s reported $10.31 in EPS, and that is precisely why the optimism is so high for this name going into the year’s end.

Rocket’s Beatdown No Longer Has Legs to It

With some housing indicators in the United States, such as falling building permits and piling house listings, showing bearish signs, it was not surprising to see a mortgage stock like Rocket Companies fall to 76% of its 52-week high. However, that price is near a basement level, considering today’s industry indicators.

In many ways, this is also a great risk-to-reward play for investors, especially as Eric Hagen from BTIG Research now predicts this stock will trade at $25 per share in his Buy rating. This call is a bold one, as it stands head and shoulders above the consensus price target of $17.12 per share; however, there are a couple of reasons why this is a reasonable one.

Mortgage rates could be coming down as the Federal Reserve cuts interest rates further this year, potentially drawing new homebuyers into the piled-up listings that the industry currently has. Q4 is just as crucial for Rocket Companies, not only due to these rate cuts, but because of where EPS are set to go.

The MarketBeat consensus suggests 12 cents in EPS for Q4, roughly triple from today’s 4 cents in earnings. Chances are, this growth isn’t reflected in the stock’s price, especially given how low it is trading today, offering investors a real chance to benefit from this upswing.

Tariffs Were Overdone for On Holding

Since On Holding has significant exposure to China, both as a customer and as a supplier, markets justified a selloff as part of a tariff exposure thesis. The result is that this stock now trades at 65% of its 52-week high, well into bear market territory, and also giving investors a high probability of having unpriced earnings growth.

With a consensus price target still set for $63.65, calling for 53.5% upside potential, this view may be more than just an opinion today. Markets are in complete agreement with this upside potential, as they’ve assigned a 92.2x price-to-earnings (P/E) ratio to the stock, a massive premium above the retail sector’s 18.8x average.

This premium can be justified by the market’s confidence in On Holding’s brand strength, growth trajectory, and exposure to global consumer trends. If the company delivers strong Q4 results and continues gaining momentum, it could help close the valuation gap and support further upside in the stock.

Read this article online ›

Featured Articles:

• Tractor Supply Stock Looks Like a Buy-and-Hold Winner
• AI Software Is Creating the Next Billion-Dollar Giants – RAD Intel Is One of Them (From RAD Intel)
• Big Banks Are Setting the Tone as Earnings Season Kicks Off
• Why Thousands Are Investing in Grid-Free Power (From Paladin Power)
• Microsoft AI Joins Congress as Lawmakers Sell Stock
• Time to Take Notice: PEGA’s GenAI Blueprint Delivers Huge Q3 Beat
• MarketBeat Week in Review – 10/20 – 10/24

Did you find this article helpful?