Wall Street is overwhelmingly bullish on the stocks in this article, with price targets suggesting significant upside potential. However, it’s worth remembering that analysts rarely issue sell ratings, partly because their firms often seek other business from the same companies they cover.
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’s enthusiasm may be misplaced and some other investments worth exploring instead.
Lovesac (LOVE)
Consensus Price Target: $29.33 (98.2% implied return)
Known for its oversized, premium beanbags, Lovesac (NASDAQ: LOVE) is a specialty furniture brand selling modular furniture.
Why Does LOVE Worry Us?
- Lackluster 1.6% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Waning returns on capital imply its previous profit engines are losing steam
Lovesac’s stock price of $14.80 implies a valuation ratio of 57.6x forward P/E. Read our free research report to see why you should think twice about including LOVE in your portfolio.
Molina Healthcare (MOH)
Consensus Price Target: $179.53 (9.1% implied return)
Founded in 1980 as a provider for underserved communities in Southern California, Molina Healthcare (NYSE: MOH) provides managed healthcare services primarily to low-income individuals through Medicaid, Medicare, and Marketplace insurance programs across 21 states.
Why Are We Wary of MOH?
- Customer additions have disappointed over the past two years, indicating the company’s value proposition may not be resonating
- Free cash flow margin shrank by 12.1 percentage points over the last five years, suggesting the company stepped up its investments to maintain its competitive edge
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Molina Healthcare is trading at $164.50 per share, or 12.7x forward P/E. Check out our free in-depth research report to learn more about why MOH doesn’t pass our bar.
TransUnion (TRU)
Consensus Price Target: $106.70 (24.1% implied return)
One of the three major credit bureaus in the United States alongside Equifax and Experian, TransUnion (NYSE: TRU) is a global information and insights company that provides credit reports, fraud prevention tools, and data analytics to help businesses make decisions and consumers manage their financial health.
Why Are We Hesitant About TRU?
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 3.5 percentage points
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 10 percentage points
- ROIC of 5.9% reflects management’s challenges in identifying attractive investment opportunities, and its shrinking returns suggest its past profit sources are losing steam
At $86.01 per share, TransUnion trades at 18.4x forward P/E. To fully understand why you should be careful with TRU, check out our full research report (it’s free for active Edge members).
Stocks We Like More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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