A big challenge that investors face is determining whether a once-successful company's struggles are just short-term problems or part of a sustained weakening of the business. In either case, the stock is likely to drop as investors assume the worst. Call it the "sell now, ask questions later" approach.

But those concerns often prove overblown, especially when it comes to companies that have a strong track record for outperforming and navigating through prior bouts of sluggishness. With that rebound potential in mind, let's take a look at a few stocks that have fallen on hard times but have a good shot at resuming their past glories.

A man smiling as money rains down around him

Image source: Getty Images.

1. iRobot

Robotic vacuum specialist iRobot (IRBT -2.84%) had been up by as much as 60% in 2019 but is now trailing the broader market with just a single-digit increase. Investors were enthusiastic about the company following its February earnings report, which showed strong sales growth, firm pricing trends, and surging profits. iRobot bumped its way into the $1 billion annual sales club in impressive fashion, with revenue passing management's outlook despite a flood of new competition last year.

Investor confidence took a sharp turn in the other direction a few months later, after the company announced a weak start in fiscal 2019. Sales growth slowed to single digits compared to 24% over the past year, and profitability dipped.

It's true that iRobot faces some challenges over the next few quarters, including rising tariff costs and the margin-pinching impact of more of its sales base shifting toward newer Roomba models that are less efficient to manufacture. There's always a risk that its latest lineup fails to stand out during the key holiday shopping season, too.

But CEO Colin Angle and his team still see 2019 playing out roughly according to their plan, with sales rising at a double-digit rate in the context of contained cost growth. Investors who agree with that vision should take a closer look at iRobot given today's discount prices.

2. Activision Blizzard

Activision Blizzard (ATVI) has had a tough run lately, with shares down by almost 40% in the past year. Yet there are good reasons to believe the video game publisher will be back before long.

Sure, the company is struggling today. Sales and earnings are declining for the first time in years. Its gaming franchises collectively are attracting fewer players thanks to the combination of stumbles in brands like Destiny and the pressure from free-to-play battle royale titles like Fortnite and EA's Apex Legends.

Activision has been through similar struggles in the past, though, and each time, the gaming giant has emerged with a stronger portfolio and record user engagement. Investors can see faint hints of that process at play today through success in core brands like World of Warcraft, in addition to new entries like the breakout hit, Sekiro: Shadows Die Twice. A flood of fresh content between now and the holiday season, meanwhile, might set the stage for a return to growth as early as 2020.

3. Carnival

Until recently, cruise ship giant Carnival (CCL 0.13%) seemed on a steady course toward easily achieving management's long-term goal of double-digit annual earnings growth and rising sales. Its vessels have been running at capacity for years, and rising prices combined with increased onboard spending to supercharge profit growth each year since 2013.

Fiscal 2019 won't be a repeat of that success, though. In fact, CEO Arnold Donald and his team recently lowered their outlook for the second straight quarter as Carnival now expects earnings to tick up by just 5% compared to 12% in 2018.

The demand struggles aren't widespread, though, with challenges limited to parts of Europe and sailings set for Cuba from the United States. Carnival's flexibility in moving its vessels should result in roughly flat sales this year despite those disruptions.

Looking further out, the cruise specialist is aggressively placing bets on bigger, more efficient ship launches. The wider economics in the industry, including demographics and a shift toward more spending on experiences, should support healthy long-term growth. Like Activision and iRobot, Carnival appears to be going through a temporary lull that's translating into sale prices for investors.