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.

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 two stocks likely to meet or exceed Wall Street’s lofty expectations and one where analysts may be overlooking some important risks.

One Stock to Sell:

Itron (ITRI)

Founded by a small group of engineers who wanted to build a more efficient way to read utility meters, Itron (NASDAQ: ITRI) offers energy and water management products for the utility industry, municipalities, and industrial customers.

Why Are We Hesitant About ITRI?

1. Flat sales over the last five years suggest it must find different ways to grow during this cycle
2. Estimated sales growth of 1.2% for the next 12 months implies demand will slow from its two-year trend
3. ROIC of 3.2% reflects management’s challenges in identifying attractive investment opportunities

At $90.53 per share, Itron trades at 18.6x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than ITRI.

Two Stocks to Watch:

AppLovin (APP)

Co-founded by Adam Foroughi, who was frustrated with not being able to find a good solution to market his own dating app, AppLovin (NASDAQ: APP) is both a mobile game studio and provider of marketing and monetization tools for mobile app developers.

Why Does APP Catch Our Eye?

1. Software platform has product-market fit given the rapid recovery of its customer acquisition costs
2. Highly efficient business model is illustrated by its impressive 39.8% operating margin, and it turbocharged its profits by achieving some fixed cost leverage
3. APP is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

AppLovin’s stock price of $234 implies a valuation ratio of 14.1x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

Xylem (XYL)

Formed through a spinoff, Xylem (NYSE: XYL) manufactures and services engineered products across a wide variety of applications primarily in the water sector.

Why Is XYL Interesting?

1. Impressive 24.5% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Average organic revenue growth of 9.3% over the past two years demonstrates its ability to expand independently without relying on acquisitions
3. Earnings per share grew by 16.5% annually over the last two years and trumped its peers

Xylem is trading at $101.51 per share, or 22x forward price-to-earnings. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.