The stocks in this article have caught Wall Street’s attention in a big way, with price targets implying returns above 20%. But investors should take these forecasts with a grain of salt because analysts typically say nice things about companies so their firms can win business in other product lines like M&A advisory.
Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. Keeping that in mind, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.
Peloton (PTON)
Consensus Price Target: $8.94 (24.6% implied return)
Started as a Kickstarter campaign, Peloton (NASDAQ: PTON) is a fitness technology company known for its at-home exercise equipment and interactive online workout classes.
Why Do We Think PTON Will Underperform?
- Performance surrounding its connected fitness subscribers has lagged its peers
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Poor expense management has led to operating losses
At $7.18 per share, Peloton trades at 8.5x forward EV-to-EBITDA. If you’re considering PTON for your portfolio, see our FREE research report to learn more.
Cable One (CABO)
Consensus Price Target: $274 (84.8% implied return)
Founded in 1986, Cable One (NYSE: CABO) provides high-speed internet, cable television, and telephone services, primarily in smaller markets across the United States.
Why Should You Sell CABO?
- Performance surrounding its residential data subscribers has lagged its peers
- Forecasted revenue decline of 2.5% for the upcoming 12 months implies demand will fall even further
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 1.5 percentage points
Cable One is trading at $148.30 per share, or 1x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including CABO in your portfolio.
Smith & Wesson (SWBI)
Consensus Price Target: $13.83 (45.3% implied return)
With a history dating back to 1852, Smith & Wesson (NASDAQ: SWBI) is a firearms manufacturer known for its handguns and rifles.
Why Do We Avoid SWBI?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Diminishing returns on capital suggest its earlier profit pools are drying up
Smith & Wesson’s stock price of $9.52 implies a valuation ratio of 16.9x forward P/E. To fully understand why you should be careful with SWBI, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
