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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. Keeping that in mind, here are three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.
WideOpenWest (WOW)
Consensus Price Target: $5.65 (46.4% implied return)
Initially started in Denver as a cable television provider, WideOpenWest (NYSE: WOW) provides high-speed internet, cable, and telephone services to the Midwest and Southeast regions of the U.S.
Why Do We Think WOW Will Underperform?
- Sluggish trends in its subscribers suggest customers aren’t adopting its solutions as quickly as the company hoped
- Negative free cash flow raises questions about the return timeline for its investments
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
WideOpenWest is trading at $3.86 per share, or 1.2x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why WOW doesn’t pass our bar.
Cadre (CDRE)
Consensus Price Target: $42.67 (26.6% implied return)
Originally known as Safariland, Cadre (NYSE: CDRE) specializes in manufacturing and distributing safety and survivability equipment for first responders.
Why Does CDRE Give Us Pause?
- Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 2 percentage points
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
- Free cash flow margin shrank by 2.9 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Cadre’s stock price of $33.70 implies a valuation ratio of 21.2x forward P/E. Read our free research report to see why you should think twice about including CDRE in your portfolio.
NeoGenomics (NEO)
Consensus Price Target: $11.05 (69% implied return)
Operating a network of CAP-accredited and CLIA-certified laboratories across the United States and United Kingdom, NeoGenomics (NASDAQ: NEO) provides specialized cancer diagnostic testing services, including genetic analysis, molecular testing, and pathology consultation for oncologists and healthcare providers.
Why Should You Dump NEO?
- Issuance of new shares over the last five years caused its earnings per share to fall by 12% annually while its revenue grew
- Push for growth has led to negative returns on capital, signaling value destruction, and its falling returns suggest its earlier profit pools are drying up
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $6.54 per share, NeoGenomics trades at 28.7x forward P/E. Dive into our free research report to see why there are better opportunities than NEO.
Stocks We Like More
Donald Trump’s April 2024 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% 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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