Down Almost 50%: Analysts Expect a Rebound for These 2 Beaten-Down Stocks

As the year winds down, investors are already scanning the landscape for stocks that can deliver gains in 2026. One place that often gets overlooked is the market's hard-hit names – the ones that have tumbled 40% or more. While these declines may scare off casual observers, seasoned Wall Street analysts know that some of the most compelling opportunities are buried in the rubble.Claim 50% Off TipRanks Premium and Invest with Confidence Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential The key is understanding the reason behind the drop. Some companies are genuinely struggling, but others have been dragged down by temporary setbacks, sentiment swings, or overly pessimistic reactions. In those cases, the selloff can create an appealing setup: beaten-down stocks that now offer both a discounted entry point and the potential to rebound as conditions improve. With that framework in mind, we turned to the TipRanks database to pinpoint names that fit the bill – stocks that have suffered steep declines yet are attracting constructive analyst attention. Below, we break down two such contenders, each carrying a Strong Buy consensus rating from the Street. Transcat (TRNS) The first stock we'll look at is Transcat, an industrial support firm based in Rochester, New York. The company is not a household name, but it does provide a set of services that are vital in modern industry: testing and calibration for all sorts of sensitive equipment. Transcat has a network of testing labs across the US, and in Canada and Ireland, where customers can have their equipment tested and accredited according to the most exacting industry standards. Transcat's services include both lab and on-site calibration, as well as quality control and instrument repair services. The company also handles pickup and delivery of equipment to be tested. One main selling point for Transcat is that the firm makes regulatory compliance easy for its clientele, allowing them in turn to offer guaranteed quality to their own customers. The company has been in the testing and calibration business for over 60 years and works with more than 30,000 customers every year. Transcat offers more than 500 lines of testing and measurement equipment and even offers equipment rental and asset management services to support customers who want to conduct testing in-house. We should note here that Transcat's shares have fallen by almost 50% so far this year. The hit to the stock has come in the wake of mixed earnings and margin compression. In the company's last reported quarter, fiscal 2Q26, Transcat reported a non-GAAP EPS of 44 cents. This figure was 8 cents per share lower than in the prior-year quarter, and it missed the forecast by a nickel. In addition, Transcat saw its adjusted net margin drop year-over-year from 7.1% to 5.1%. Elsewhere in the earnings report, Transcat reported solid revenues. The top line of $82.27 million was up more than 21% year-over-year and came in $2.55 million better than had been expected. For Craig-Hallum analyst Greg Palm, Transcat shows potential for soild growth, starting in the second half of its fiscal year 2026. Palm sees the current low share price as a chance for investors to buy into a fundamentally sound stock at a discount price. "Management continues to expect that the service business will return to HSD% organic growth in the 2H, a marked improvement from recent quarters' results. Commentary suggests a continued normalization of the Solutions business as well as a number of new account wins recently, which gives some good visibility into better growth in the near-term," Palm opined. "We see continued improvement in the P&L and potential for additional positive earnings revisions. With the stock sitting close to 52 week lows, either investors aren't paying attention or aren't aware of the upcoming improvements." To this end, Palm puts a Buy rating on TRNS shares, which he complements with a $111 price target – pointing toward a robust one-year gain of 110%. (To watch Palm's track record, click here) Overall, Transcat has a unanimous Strong Buy consensus rating, based on 3 recent positive analyst reviews. The shares are currently priced at $52.95 and their $100 average price target implies a one-year upside potential of 89%. (See TRNS stock forecast)