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.
Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. Keeping that in mind, here are two stocks where Wall Street’s positive outlook is supported by strong fundamentals and one where analysts may be overlooking some important risks.
One Stock to Sell:
Kirby (KEX)
Consensus Price Target: $120.60 (23.3% implied return)
Transporting goods along all U.S. coasts, Kirby (NYSE: KEX) provides inland and coastal marine transportation services.
Why Does KEX Give Us Pause?
- Muted 4.4% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Free cash flow margin dropped by 7 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Low returns on capital reflect management’s struggle to allocate funds effectively
Kirby’s stock price of $97.79 implies a valuation ratio of 14x forward P/E. Read our free research report to see why you should think twice about including KEX in your portfolio.
Two Stocks to Watch:
Arlo Technologies (ARLO)
Consensus Price Target: $23.20 (35.8% implied return)
Originally spun off from networking equipment maker Netgear in 2018, Arlo Technologies (NYSE: ARLO) provides cloud-based smart security devices and subscription services that help consumers and businesses monitor and protect their homes, properties, and loved ones.
Why Are We Fans of ARLO?
- Operating margin improvement of 13.1 percentage points over the last five years demonstrates its ability to scale efficiently
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 434% outpaced its revenue gains
- Free cash flow margin expanded by 17.4 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Arlo Technologies is trading at $17.08 per share, or 25.3x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
DexCom (DXCM)
Consensus Price Target: $102.08 (33.6% implied return)
Founded in 1999 and receiving its first FDA approval in 2006, DexCom (NASDAQ: DXCM) develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks.
Why Is DXCM a Good Business?
- Average organic revenue growth of 17.8% over the past two years demonstrates its ability to expand independently without relying on acquisitions
- Earnings per share grew by 17.5% annually over the last five years, massively outpacing its peers
- Free cash flow margin grew by 8.6 percentage points over the last five years, giving the company more chips to play with
At $76.42 per share, DexCom trades at 32.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
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 Tecnoglass (+1,754% 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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