Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. Keeping that in mind, here is one stock where Wall Street’s pessimism is creating a buying opportunity and two facing legitimate challenges.
Two Stocks to Sell:
CarMax (KMX)
Consensus Price Target: $39.92 (-5.3% implied return)
Known for its transparent, customer-centric approach and wide selection of vehicles, Carmax (NYSE: KMX) is the largest automotive retailer in the United States.
Why Do We Pass on KMX?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Commoditized inventory, bad unit economics, and high competition are reflected in its low gross margin of 6%
At $42.13 per share, CarMax trades at 18.2x forward P/E. Check out our free in-depth research report to learn more about why KMX doesn’t pass our bar.
Great Lakes Dredge & Dock (GLDD)
Consensus Price Target: $17 (0.6% implied return)
Founded as Lydon & Drews dredging company, Great Lakes Dredge & Dock (NASDAQ: GLDD) provides dredging services, land reclamation, and coastal protection projects in the United States and internationally.
Why Does GLDD Give Us Pause?
- Backlog growth averaged a weak 4.2% over the past two years, suggesting it may need to tweak its product roadmap or go-to-market strategy
- Gross margin of 16.9% reflects its high production costs
- Cash-burning history makes us doubt the long-term viability of its business model
Great Lakes Dredge & Dock’s stock price of $16.91 implies a valuation ratio of 17.3x forward P/E. If you’re considering GLDD for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Airbnb (ABNB)
Consensus Price Target: $145 (10.1% implied return)
Founded by Brian Chesky and Joe Gebbia in their San Francisco apartment, Airbnb (NASDAQ: ABNB) is the world’s largest online marketplace for lodging, primarily homestays.
Why Is ABNB a Good Business?
- Nights and Experiences Booked have increased by an average of 9.1% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Excellent EBITDA margin of 35.7% highlights the efficiency of its business model
- Robust free cash flow margin of 39% gives it many options for capital deployment
Airbnb is trading at $131.72 per share, or 15x forward EV/EBITDA. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
