Wall Street has set ambitious price targets for the stocks in this article. While this suggests attractive upside potential, it’s important to remain skeptical because analysts face institutional pressures that can sometimes lead to overly optimistic forecasts.
Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. Keeping that in mind, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.
Health Catalyst (HCAT)
Consensus Price Target: $3.94 (64.4% implied return)
Built on its "Health Catalyst Flywheel" methodology that emphasizes measurable outcomes, Health Catalyst (NASDAQ: HCAT) provides data and analytics technology and services that help healthcare organizations manage their data and drive measurable clinical, financial, and operational improvements.
Why Is HCAT Risky?
- 4.4% annual revenue growth over the last two years was slower than its software peers
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
- Cash burn makes us question whether it can achieve sustainable long-term growth
At $2.40 per share, Health Catalyst trades at 0.6x forward price-to-sales. Read our free research report to see why you should think twice about including HCAT in your portfolio.
Bright Horizons (BFAM)
Consensus Price Target: $129.44 (24.3% implied return)
Founded in 1986, Bright Horizons (NYSE: BFAM) is a global provider of child care, early education, and workforce support solutions.
Why Do We Steer Clear of BFAM?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Free cash flow margin is expected to increase by 1.4 percentage points next year, suggesting the company will have more capital to invest or return to shareholders
- Returns on capital are growing as management invests in more worthwhile ventures
Bright Horizons is trading at $104.13 per share, or 20.4x forward P/E. Check out our free in-depth research report to learn more about why BFAM doesn’t pass our bar.
Crown Holdings (CCK)
Consensus Price Target: $121.50 (19.9% implied return)
Formerly Crown Cork & Seal, Crown Holdings (NYSE: CCK) produces packaging products for consumer marketing companies, including food, beverage, household, and industrial products.
Why Are We Wary of CCK?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Anticipated sales growth of 3.1% for the next year implies demand will be shaky
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 20.5%
Crown Holdings’s stock price of $101.36 implies a valuation ratio of 12.1x forward P/E. If you’re considering CCK for your portfolio, see our FREE research report to learn more.
Stocks We Like More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our 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 244% over the last five years (as of June 30, 2025).
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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
