When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as M&A advisory.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. Keeping that in mind, here is one stock poised to prove Wall Street wrong and two where the outlook is warranted.
Two Stocks to Sell:
Western Digital (WDC)
Consensus Price Target: $127.13 (0.4% implied return)
Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.
Why Does WDC Fall Short?
- Sales tumbled by 10.7% annually over the last five years, showing market trends are working against its favor during this cycle
- Negative 7.7% gross margin means it loses money on every sale and must pivot or scale quickly to survive
- Low free cash flow margin of 4.4% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Western Digital’s stock price of $126.58 implies a valuation ratio of 18.3x forward P/E. Check out our free in-depth research report to learn more about why WDC doesn’t pass our bar.
Hertz (HTZ)
Consensus Price Target: $4.01 (-22.1% implied return)
Started with a dozen Model T Fords, Hertz (NASDAQ: HTZ) is a global car rental company providing vehicle rental services to leisure and business travelers.
Why Should You Sell HTZ?
- Underwhelming unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
At $5.15 per share, Hertz trades at 10.8x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including HTZ in your portfolio.
One Stock to Watch:
MongoDB (MDB)
Consensus Price Target: $350.80 (6.1% implied return)
Named after "humongous database," reflecting its ability to handle massive data loads, MongoDB (NASDAQ: MDB) provides a flexible document-based database platform that helps developers build, deploy, and maintain modern applications more efficiently.
Why Could MDB Be a Winner?
- Market share has increased as its 34.6% annual revenue growth over the last five years was exceptional
- ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
MongoDB is trading at $330.50 per share, or 10.5x 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.
Stocks We Like Even 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 Comfort Systems (+782% 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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