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. That said, here is one stock where Wall Street’s positive outlook is supported by strong fundamentals and two where its enthusiasm might be excessive.
Two Stocks to Sell:
Sprinklr (CXM)
Consensus Price Target: $11 (47.3% implied return)
With a proprietary AI engine processing 450 million data points daily across 30+ digital channels, Sprinklr (NYSE: CXM) provides cloud-based software that helps large enterprises manage customer experiences across social, messaging, chat, and voice channels.
Why Do We Avoid CXM?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 3.1% underwhelmed
- Estimated sales growth of 4.3% for the next 12 months implies demand will slow from its two-year trend
- Operating margin didn’t move over the last year, showing it couldn’t increase its efficiency
Sprinklr is trading at $7.47 per share, or 2.3x forward price-to-sales. To fully understand why you should be careful with CXM, check out our full research report (it’s free for active Edge members).
Cars.com (CARS)
Consensus Price Target: $16.71 (50% implied return)
Originally started as a joint venture between several media companies including The Washington Post and The New York Times, Cars.com (NYSE: CARS) is a digital marketplace that connects new and used car buyers and sellers.
Why Does CARS Fall Short?
- Dealer Customers have stagnated over the last two years, indicating its platform may be struggling to differentiate itself from competitors
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.7%
- Earnings per share have contracted by 2% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
At $11.14 per share, Cars.com trades at 3.2x forward EV/EBITDA. If you’re considering CARS for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Doximity (DOCS)
Consensus Price Target: $70.44 (28.7% implied return)
With over 80% of U.S. physicians as members of its digital community, Doximity (NYSE: DOCS) operates a digital platform that enables physicians and other healthcare professionals to collaborate, stay current with medical news, manage their careers, and conduct virtual patient visits.
Why Will DOCS Beat the Market?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 20.1% over the last year
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- DOCS is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Doximity’s stock price of $54.75 implies a valuation ratio of 16.2x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "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 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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