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.
Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. That said, here is one stock likely to meet or exceed Wall Street’s lofty expectations and two where analysts may be overlooking some important risks.
Two Stocks to Sell:
Strategy (MSTR)
Consensus Price Target: $524.50 (122% implied return)
Once a traditional business intelligence software provider, Strategy (NASDAQ: MSTR) develops AI-powered enterprise analytics software while also functioning as a major corporate holder of Bitcoin cryptocurrency.
Why Should You Dump MSTR?
- MicroStrategy’s core analytics software has been eclipsed by its all-in Bitcoin strategy, leaving product innovation and enterprise deals starved for attention
- The company’s debt-financed Bitcoin buying ties shareholder fortunes to crypto swings and interest rates, amplifying downside risk and uncertainty
- On the bright side, its vast Bitcoin treasury gives Executive Chairman Michael Saylor a unique springboard to capture crypto upside and court investors seeking leveraged exposure to digital assets
Strategy is trading at $236.75 per share, or 151.1x forward price-to-sales. Check out our free in-depth research report to learn more about why MSTR doesn’t pass our bar.
Xerox (XRX)
Consensus Price Target: $4.50 (48.5% implied return)
Pioneering the modern office copier and inventing technologies like Ethernet and the laser printer, Xerox (NASDAQ: XRX) provides document management systems, printing technology, and workplace solutions to businesses of all sizes across the globe.
Why Are We Out on XRX?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.6% annually over the last five years
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
- 8× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
Xerox’s stock price of $3.03 implies a valuation ratio of 1.9x forward P/E. To fully understand why you should be careful with XRX, check out our full research report (it’s free for active Edge members).
One Stock to Buy:
Reddit (RDDT)
Consensus Price Target: $240.27 (30.5% implied return)
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE: RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Why Do We Love RDDT?
- Domestic Daily Active Visitors have increased by an average of 32.3% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Earnings per share grew by 40.3% annually over the last three years, massively outpacing its peers
- Free cash flow margin increased by 41.8 percentage points over the last few years, giving the company more capital to invest or return to shareholders
At $184.11 per share, Reddit trades at 34x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
High-Quality Stocks for All Market Conditions
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
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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