Wall Street has set ambitious price targets for the stocks in this article. While this suggests attractive upside potential, it’s important to remain skeptical because analysts face institutional pressures that can sometimes lead to overly optimistic forecasts.
Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. That said, here are three stocks where Wall Street’s estimates seem disconnected from reality and some better opportunities to consider.
CarGurus (CARG)
Consensus Price Target: $38.88 (40.6% implied return)
Bringing transparency to a sometimes opaque process, CarGurus (NASDAQ: CARG) is a digital marketplace where auto dealers can connect with potential customers and where car buyers can browse, purchase, and obtain financing.
Why Do We Think Twice About CARG?
- Paying Dealers have stagnated over the last two years, indicating its platform may be struggling to differentiate itself from competitors
- Estimated sales growth of 5.3% for the next 12 months is soft and implies weaker demand
- Earnings growth underperformed the sector average over the last three years as its EPS grew by just 5.2% annually
CarGurus is trading at $27.64 per share, or 10.8x forward EV/EBITDA. To fully understand why you should be careful with CARG, check out our full research report (it’s free).
Bel Fuse (BELFA)
Consensus Price Target: $113 (76.3% implied return)
Founded by 26-year-old Elliot Bernstein during the electronics boom after WW2, Bel Fuse (NASDAQ: BELF.A) provides electronic systems and devices to the telecommunications, networking, transportation, and industrial sectors.
Why Are We Hesitant About BELFA?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 10% annually over the last two years
- Earnings per share have dipped by 16.9% annually over the past two years, which is concerning because stock prices follow EPS over the long term
At $64.10 per share, Bel Fuse trades at 6.7x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than BELFA.
Apogee (APOG)
Consensus Price Target: $55 (34.3% implied return)
Involved in the design of the Apple Store on Fifth Avenue in New York City, Apogee (NASDAQ: APOG) sells architectural products and services such as high-performance glass for commercial buildings.
Why Is APOG Not Exciting?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Free cash flow margin shrank by 2.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Apogee’s stock price of $40.96 implies a valuation ratio of 9.6x forward P/E. Check out our free in-depth research report to learn more about why APOG doesn’t pass our bar.
Stocks That Overcame Trump’s 2018 Tariffs
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. 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 United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
