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 are two stocks where Wall Street’s excitement appears well-founded and one where its enthusiasm might be excessive.

One Stock to Sell:

Paycom (PAYC)

Consensus Price Target: $249.25 (21.6% implied return)

Pioneering the concept of employees doing their own payroll with its "Beti" technology, Paycom (NYSE: PAYC) provides cloud-based human capital management software that helps businesses manage the entire employment lifecycle from recruitment to retirement.

Why Are We Cautious About PAYC?

1. Products, pricing, or go-to-market strategy may need some adjustments as its 9.7% average billings growth over the last year was weak
2. Estimated sales growth of 9.4% for the next 12 months implies demand will slow from its two-year trend
3. Efficiency has decreased over the last year as its operating margin fell by 4.8 percentage points

Paycom’s stock price of $204.93 implies a valuation ratio of 5.3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than PAYC.

Two Stocks to Watch:

Confluent (CFLT)

Consensus Price Target: $24.59 (21% implied return)

Built by the original creators of Apache Kafka, the popular open-source messaging system, Confluent (NASDAQ: CFLT) provides a data infrastructure platform that enables organizations to connect their applications, systems, and data layers around real-time data streams.

Why Could CFLT Be a Winner?

1. Billings growth has averaged 32.6% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
2. Estimated revenue growth of 16.2% for the next 12 months implies its momentum over the last two years will continue
3. Adequate gross margin of 74.2% gives it sufficient room to spend on marketing and product development

Confluent is trading at $20.33 per share, or 5.6x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .

Natera (NTRA)

Consensus Price Target: $193.21 (17.8% implied return)

Founded in 2003 as Gene Security Network before rebranding in 2012, Natera (NASDAQ: NTRA) develops and commercializes genetic tests for prenatal screening, cancer detection, and organ transplant monitoring using its proprietary cell-free DNA technology.

Why Do We Love NTRA?

1. Products are reaching more customers as its tests processed averaged 21% growth over the past two years
2. Adjusted operating margin improvement of 38.7 percentage points over the last two years demonstrates its ability to scale efficiently
3. Free cash flow flipped to positive over the last five years, indicating the company has achieved financial self-sustainability

At $164.01 per share, Natera trades at 10.3x 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 9 Market-Beating Stocks. 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.