2 Beaten-Down Stocks That Still Aren't Worth Buying

It's often wise to wait until a significant correction before investing in a stock. However, that strategy only works when the company can recover from whatever obstacle led to the sell-off. When that's not the case, investing in a beaten-down stock is like catching the proverbial falling knife. That said, let's consider two stocks that have lost significant market value in recent years but still aren't worth the trouble: Canopy Growth (NASDAQ: CGC) and Sarepta Therapeutics (NASDAQ: SRPT).

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1. Canopy Growth

Canopy Growth has been a terrible stock to own over the past five years. Things aren't looking up for the pot grower, and investors who still hold its shares had better abandon ship and salvage what they can before it's too late. Here are two reasons the cannabis company's prospects aren't good. First, its financial results remain subpar, even when Canopy Growth performs better than expected.

That was the case during its latest period, the third quarter of its fiscal year 2026, ending on Dec. 31. Canopy Growth's net revenue remained flat year over year, landing at 75 million Canadian dollars ($54.6 million). The bottom line improved by 49%, but Canopy Growth is still bleeding money, reporting a net loss per share of CA$0.18 ($0.13) during the period.

Some might think that, since things seem to be improving for Canopy Growth on the bottom line, the stock is worth a second look. But -- and here's our second reason to stay away from the stock -- the cannabis industry remains a highly regulated, challenging-to-navigate quagmire whose future is, at best, uncertain. Will the U.S. finally legalize weed at the federal level?

If it does, what new rules will it adopt for consumers and distributors? How will companies in adjacent industries respond? These and many other questions are impossible to answer for now. The cannabis market's challenges are a major reason it's tough to find a single pot company that hasn't performed terribly over the past five years. Things are not about to get better. It's best to avoid Canopy Growth along with the entire sector.

2. Sarepta Therapeutics

Sarepta Therapeutics has faced headwinds as its most important medicine, Elevidys, which treats a rare disease called Duchenne muscular dystrophy (DMD, a rare, progressive, muscle-wasting disorder), caused the death of two patients due to liver failure. The company has worked hard to remedy the situation, notably by adding an appropriate boxed warning and suspending shipments to the most vulnerable populations.

Despite these efforts, the company's financial results have worsened significantly. Sarepta Therapeutics' fourth-quarter 2025 revenue dropped by 33% year over year to $442.9 million. The company's total revenue for the year did increase, but that was because the issues with Elevidys happened mostly in the second half of 2025. And amid all that, the stock is down 79% over the past 12 months.

Could Sarepta Therapeutics bounce back? Maybe, but in my view, the stock is far too risky. Besides the Elevidys-related issues, the company announced another patient death, also from liver issues, linked to an investigational medicine it has now abandoned. That's not a good sign. And lastly, although Sarepta is seeking full approval for other medicines for DMD -- notably Amondys 45 and Vyondys 53 -- recent results from a confirmatory clinical trial for these products were unimpressive, as both missed their primary endpoints.

Sarepta's poor financial results and unimpressive clinical progress make it an unattractive option. There are plenty of more exciting biotech stocks to consider buying.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.