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. That said, here are three stocks where Wall Street’s estimates seem disconnected from reality and some better opportunities to consider.
Wabash (WNC)
Consensus Price Target: $20.50 (88.7% implied return)
With its first trailer reportedly built on two sawhorses, Wabash (NYSE: WNC) offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods.
Why Do We Avoid WNC?
- Demand cratered as it couldn’t win new orders over the past two years, leading to an average 24.3% decline in its backlog
- 5.1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $9.01 per share, Wabash trades at 7.4x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than WNC.
Carlisle (CSL)
Consensus Price Target: $471.67 (26.2% implied return)
Originally founded as Carlisle Tire and Rubber Company, Carlisle Companies (NYSE: CSL) is a multi-industry product manufacturer focusing on construction materials and weatherproofing technologies.
Why Is CSL Not Exciting?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Anticipated sales growth of 3.9% for the next year implies demand will be shaky
- Earnings per share lagged its peers over the last two years as they only grew by 5.3% annually
Carlisle’s stock price of $350.59 implies a valuation ratio of 15.5x forward price-to-earnings. Check out our free in-depth research report to learn more about why CSL doesn’t pass our bar.
RadNet (RDNT)
Consensus Price Target: $86.17 (45% implied return)
With over 350 imaging facilities across seven states and a growing artificial intelligence division, RadNet (NASDAQ: RDNT) operates a network of outpatient diagnostic imaging centers across the United States, offering services like MRI, CT scans, PET scans, mammography, and X-rays.
Why Do We Think Twice About RDNT?
- Subscale operations are evident in its revenue base of $1.83 billion, meaning it has fewer distribution channels than its larger rivals
- Free cash flow margin dropped by 10 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- ROIC of 6.8% reflects management’s challenges in identifying attractive investment opportunities
RadNet is trading at $50.34 per share, or 81x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than RDNT.
Stocks We Like More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
