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.
Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. Keeping that in mind, here are three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.
Revolve (RVLV)
Consensus Price Target: $24.57 (17.7% implied return)
Launched in 2003 by software engineers Michael Mente and Mike Karanikolas, Revolve (NASDAQ: RVLV) is a fashion retailer leveraging social media and a community of fashion influencers to drive its merchandising strategy.
Why Should You Sell RVLV?
- May need to improve its platform and marketing strategy as its 6.5% average growth in active customers underwhelmed
- Key performance metrics have been flashing red recently as its average revenue per buyer dropped by 1.5% annually while engagement was weak
- Earnings per share have contracted by 18% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
Revolve is trading at $20.88 per share, or 21.7x forward EV/EBITDA. To fully understand why you should be careful with RVLV, check out our full research report (it’s free for active Edge members).
Upland Software (UPLD)
Consensus Price Target: $4.33 (78.3% implied return)
Operating under the mantra "land and expand," Upland Software (NASDAQ: UPLD) provides cloud-based applications that help organizations manage projects, workflows, and digital transformation across various business functions.
Why Are We Wary of UPLD?
- Sales were flat over the last five years, indicating it’s failed to expand its business
- Forecasted revenue decline of 19.2% for the upcoming 12 months implies demand will fall even further
- Historical operating margin losses point to an inefficient cost structure
Upland Software’s stock price of $2.43 implies a valuation ratio of 0.3x forward price-to-sales. Read our free research report to see why you should think twice about including UPLD in your portfolio.
Pegasystems (PEGA)
Consensus Price Target: $64.73 (18% implied return)
With a "Center-out Business Architecture" approach that transcends organizational silos, Pegasystems (NASDAQ: PEGA) develops software that helps organizations automate workflows and use artificial intelligence to improve customer experiences and business processes.
Why Do We Think Twice About PEGA?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 13.5% underwhelmed
- Estimated sales growth of 3.6% for the next 12 months implies demand will slow from its two-year trend
- Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
At $54.87 per share, Pegasystems trades at 5.8x forward price-to-sales. Dive into our free research report to see why there are better opportunities than PEGA.
Stocks We Like More
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 Strong Momentum Stocks for this week. 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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