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 three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.
Getty Images (GETY)
Consensus Price Target: $4.42 (136% implied return)
With a vast library of over 562 million visual assets documenting everything from breaking news to iconic historical moments, Getty Images (NYSE: GETY) is a global visual content marketplace that licenses photos, videos, illustrations, and music to businesses, media outlets, and creative professionals.
Why Are We Out on GETY?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7.3 percentage points
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Getty Images’s stock price of $1.87 implies a valuation ratio of 2.4x forward EV-to-EBITDA. If you’re considering GETY for your portfolio, see our FREE research report to learn more.
Calavo (CVGW)
Consensus Price Target: $33 (43.5% implied return)
A trailblazer in the avocado industry, Calavo Growers (NASDAQ: CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.
Why Is CVGW Risky?
- Sales tumbled by 15.8% annually over the last three years, showing consumer trends are working against its favor
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Gross margin of 10.5% is below its competitors, leaving less money to invest in areas like marketing and production facilities
Calavo is trading at $23 per share, or 12.2x forward P/E. Dive into our free research report to see why there are better opportunities than CVGW.
Two Harbors Investment (TWO)
Consensus Price Target: $13.16 (21.5% implied return)
Operating as one of the largest servicers of conventional mortgage loans in the United States through its RoundPoint platform, Two Harbors Investment (NYSE: TWO) is a real estate investment trust that invests in mortgage servicing rights and agency residential mortgage-backed securities.
Why Should You Sell TWO?
- Earnings per share fell by 29.9% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Loan losses and capital returns have eroded its tangible book value this cycle as its tangible book value per share declined by 12% annually over the last five years
- Underwhelming 5.2% return on equity reflects management’s difficulties in finding profitable growth opportunities
At $10.83 per share, Two Harbors Investment trades at 0.8x forward P/B. Read our free research report to see why you should think twice about including TWO in your portfolio.
Stocks We Like More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 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.
