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Motley Fool Identifies 3 Stocks Poised for Recovery by 2026

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  Published in Stocks and Investing on Sunday, December 28th 2025 at 15:43 GMT by The Motley Fool

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Bouncing Back: Three Stocks The Motley Fool Believes Could Recover in 2026

The market isn’t always a straight line upward. Downturns happen, and some companies experience significant setbacks. But as any seasoned investor knows, these periods can also present opportunities to acquire solid businesses at discounted prices – assuming you're confident they can recover. A recent article on The Motley Fool highlights three stocks that the publication believes have the potential to bounce back in 2026, despite facing current challenges. These aren’t guaranteed winners, of course; all investing carries risk. However, the analysis suggests these companies possess underlying strengths and catalysts that could drive a recovery. Let's break down each pick and understand why The Motley Fool is optimistic.

1. Etsy (ETSY): Navigating a Post-Pandemic Reality

Etsy, the online marketplace for handmade and vintage goods, has been struggling since the pandemic boom subsided. The article points out that Etsy’s growth exploded during 2020 and 2021 as consumers sought unique gifts and experiences while stuck at home. However, this surge proved unsustainable. The company is now facing headwinds including macroeconomic uncertainty (consumers tightening their belts), increased competition from larger e-commerce platforms like Amazon, and a shift in buyer behavior. The Fool’s article notes Etsy's recent earnings reports have reflected these challenges, with slowing revenue growth and concerns about profitability.

However, the analysis emphasizes that Etsy isn't fundamentally broken. The platform still boasts a loyal community of both buyers and sellers, and its niche focus on unique, handcrafted items differentiates it from mass-market retailers. The key to Etsy’s recovery lies in reigniting growth. The article suggests several potential catalysts:

• Offshore Sellers: Etsy is actively working to onboard more sellers based outside the US, particularly in countries with lower labor costs. This could lead to a wider variety of products and potentially lower prices for buyers, boosting competitiveness. The Fool’s piece references an earlier article detailing Etsy's strategy to attract these international sellers, acknowledging it's a complex undertaking but one with significant potential upside.
• Improved Buyer Experience: Etsy is investing in improving its search functionality and overall user experience to make it easier for buyers to find what they're looking for. This includes personalized recommendations and enhanced product discovery tools.
• Strategic Acquisitions: While not explicitly mentioned as a near-term catalyst, the article implies that strategic acquisitions could help Etsy expand its offerings and reach new markets.

The Fool believes that if Etsy can successfully execute these strategies and navigate the current economic climate, it has the potential to rebound significantly by 2026. The current price reflects investor pessimism, potentially creating a buying opportunity for those who believe in the company's long-term prospects.

2. Paramount Global (PARA): A Content Powerhouse Facing Streaming Struggles

Paramount Global, home to iconic brands like CBS, Nickelodeon, and MTV, is another stock facing significant challenges. The article highlights that Paramount’s primary issue stems from its streaming business, Paramount+. While the service has gained subscribers, it's not yet profitable, and the company faces intense competition in the crowded streaming landscape dominated by Netflix, Disney+, and others. The constant need to invest heavily in content creation to attract and retain subscribers is putting a strain on Paramount’s finances.

Furthermore, concerns about corporate governance and potential leadership changes have added to investor uncertainty. The article references reports of activist investors pushing for change within the company, including exploring a sale or merger. This instability has weighed heavily on the stock price.

Despite these headwinds, The Motley Fool remains cautiously optimistic. Paramount possesses an incredibly valuable library of content – a significant competitive advantage in the long run. The key to recovery lies in:

• Content Strategy: Paramount needs to refine its streaming content strategy, focusing on high-quality programming that attracts and retains subscribers while minimizing costs.
• Strategic Partnerships: The article suggests exploring partnerships with other streaming services or media companies could help share the burden of content creation and expand reach. A merger is also a possibility, though fraught with complexities.
• Linear TV Strength: While streaming is crucial for future growth, Paramount’s traditional television networks still generate significant revenue. Maintaining their strength is vital to supporting the streaming business.

The Fool acknowledges that Paramount's turnaround will be challenging and could take time. However, the underlying value of its content library makes it an attractive long-term investment if management can successfully navigate these challenges.

3. AMC Entertainment (AMC): Rebuilding After Pandemic Devastation

AMC Entertainment, the largest movie theater chain in the world, was severely impacted by the COVID-19 pandemic and subsequent lockdowns. While the company has made significant progress in recovering from those initial shocks, it still faces ongoing challenges including high debt levels and evolving consumer preferences regarding entertainment consumption. The article points out that streaming services have fundamentally altered how people consume movies, posing a long-term threat to traditional movie theaters.

AMC’s recovery strategy revolves around enhancing the theatrical experience and attracting audiences back to cinemas. This includes:

• Premium Formats: Investing in premium formats like IMAX and Dolby Cinema to offer an immersive viewing experience that can't be replicated at home.
• Loyalty Programs: Strengthening its loyalty program, AMC Stubs, to reward frequent moviegoers and build customer loyalty.
• Diversification of Revenue Streams: Exploring alternative revenue streams such as gaming, events, and food & beverage sales.

The Fool’s article acknowledges that AMC's future is uncertain and heavily reliant on the continued popularity of theatrical releases. However, they believe that the company has taken steps to improve its financial position and enhance the moviegoing experience, which could lead to a rebound in 2026. The stock remains highly speculative, but the potential for significant upside exists if AMC can successfully execute its turnaround plan.

Disclaimer: This article is based on information from The Motley Fool's article linked above. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This is not financial advice; consult with a qualified professional before making any investment decisions.