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3 of Wall Street’s Favorite Stocks We Approach with Caution

CRM Cover Image

Wall Street is overwhelmingly bullish on the stocks in this article, with price targets suggesting significant upside potential. However, it’s worth remembering that analysts rarely issue sell ratings, partly because their firms often seek other business from the same companies they cover.

At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. That said, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.

Salesforce (CRM)

Consensus Price Target: $331.81 (38.5% implied return)

With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce (NYSE: CRM) provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.

Why Does CRM Fall Short?

  1. ARR growth averaged a weak 9% over the last year, suggesting that competition is pulling some attention away from its software
  2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 8.9%
  3. Operating margin improvement of 2.1 percentage points over the last year demonstrates its ability to scale efficiently

Salesforce is trading at $239.60 per share, or 5.4x forward price-to-sales. Dive into our free research report to see why there are better opportunities than CRM.

Inspired (INSE)

Consensus Price Target: $13.50 (66.5% implied return)

Specializing in digital casino gaming, Inspired (NASDAQ: INSE) is a provider of gaming hardware, virtual sports platforms, and server-based gaming systems.

Why Do We Steer Clear of INSE?

  1. Sales tumbled by 1.3% annually over the last two years, showing consumer trends are working against its favor
  2. Projected sales decline of 10.9% over the next 12 months indicates demand will continue deteriorating
  3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

At $8.11 per share, Inspired trades at 30.2x forward P/E. To fully understand why you should be careful with INSE, check out our full research report (it’s free for active Edge members).

Live Nation (LYV)

Consensus Price Target: $171.55 (25% implied return)

Owner of Ticketmaster and operator of music festival EDC, Live Nation (NYSE: LYV) is a company specializing in live event promotion, venue management, and ticketing services for concerts and shows.

Why Do We Think Twice About LYV?

  1. Demand for its offerings was relatively low as its number of events has underwhelmed
  2. Subpar operating margin of 4.5% constrains its ability to invest in process improvements or effectively respond to new competitive threats
  3. Low free cash flow margin of 6.5% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders

Live Nation’s stock price of $137.26 implies a valuation ratio of 68.4x forward P/E. Check out our free in-depth research report to learn more about why LYV doesn’t pass our bar.

High-Quality Stocks for All Market Conditions

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-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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