Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. That said, here is one stock poised to prove Wall Street wrong and two where the skepticism is well-placed.
Two Stocks to Sell:
Qualys (QLYS)
Consensus Price Target: $141.02 (5.9% implied return)
Originally developed to address the growing complexity of IT security in the cloud era, Qualys (NASDAQ: QLYS) provides a cloud-based platform that helps organizations identify, manage, and protect their IT assets from cyber threats across on-premises, cloud, and mobile environments.
Why Does QLYS Worry Us?
- Customers were hesitant to make long-term commitments to its software as its 9.6% average ARR growth over the last year was sluggish
- Estimated sales growth of 6.8% for the next 12 months implies demand will slow from its three-year trend
- Free cash flow margin is forecasted to shrink by 3.9 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
Qualys is trading at $133.14 per share, or 7.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than QLYS.
Supernus Pharmaceuticals (SUPN)
Consensus Price Target: $43 (-1.1% implied return)
With a diverse portfolio of eight FDA-approved medications targeting neurological conditions, Supernus Pharmaceuticals (NASDAQ: SUPN) develops and markets treatments for central nervous system disorders including epilepsy, ADHD, Parkinson's disease, and migraine.
Why Are We Wary of SUPN?
- Annual revenue growth of 2.4% over the last two years was below our standards for the healthcare sector
- Subscale operations are evident in its revenue base of $665.1 million, meaning it has fewer distribution channels than its larger rivals
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $43.50 per share, Supernus Pharmaceuticals trades at 22.3x forward P/E. Check out our free in-depth research report to learn more about why SUPN doesn’t pass our bar.
One Stock to Watch:
DXP (DXPE)
Consensus Price Target: $125 (0.5% implied return)
Founded during the emergence of Big Oil in Texas, DXP (NASDAQ: DXPE) provides pumps, valves, and other industrial components.
Why Do We Like DXPE?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 10.4% annual sales growth over the last five years
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 32.6% exceeded its revenue gains over the last two years
DXP’s stock price of $124.36 implies a valuation ratio of 22x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
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 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-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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