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1 of Wall Street’s Favorite Stock for Long-Term Investors and 2 to Question

HCAT 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.

Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. That said, here is one stock likely to meet or exceed Wall Street’s lofty expectations and two where analysts may be overlooking some important risks.

Two Stocks to Sell:

Health Catalyst (HCAT)

Consensus Price Target: $8.09 (124% implied return)

Founded by healthcare professionals Tom Burton and Steve Barlow in 2008, Health Catalyst (NASDAQ: HCAT) provides data and analytics technology to healthcare organizations, enabling them to improve care and lower costs.

Why Are We Hesitant About HCAT?

  1. Sales trends were unexciting over the last three years as its 7% annual growth was well below the typical software company
  2. Sky-high servicing costs result in an inferior gross margin of 45.9% that must be offset through increased usage
  3. Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions

Health Catalyst’s stock price of $3.62 implies a valuation ratio of 0.7x forward price-to-sales. Dive into our free research report to see why there are better opportunities than HCAT.

Tilly's (TLYS)

Consensus Price Target: $2.50 (189% implied return)

With an emphasis on skate and surf culture, Tilly’s (NYSE: TLYS) is a specialty retailer that sells clothing, footwear, and accessories geared towards fashion-forward teens and young adults.

Why Is TLYS Risky?

  1. Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
  2. Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 32.2% annually, worse than its revenue
  3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

At $0.87 per share, Tilly's trades at 0x forward price-to-sales. Read our free research report to see why you should think twice about including TLYS in your portfolio.

One Stock to Watch:

Integral Ad Science (IAS)

Consensus Price Target: $13.39 (70.6% implied return)

Founded in 2009, Integral Ad Science (NASDAQ: IAS) provides digital advertising verification and optimization solutions, ensuring that ads are viewable by real people in brand-safe environments across various platforms and devices.

Why Does IAS Stand Out?

  1. Software platform has product-market fit given the rapid recovery of its customer acquisition costs
  2. Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
  3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

Integral Ad Science is trading at $7.85 per share, or 2.1x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full 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 176% over the last five years.

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 Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.

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