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. Keeping that in mind, here is one stock where Wall Street’s positive outlook is supported by strong fundamentals and two where analysts may be overlooking some important risks.
Two Stocks to Sell:
Lincoln Educational (LINC)
Consensus Price Target: $22.80 (24.9% implied return)
Established in 1946, Lincoln Educational (NASDAQ: LINC) is a provider of specialized technical training in the United States, offering career-oriented programs to provide practical skills required in the workforce.
Why Are We Cautious About LINC?
- Number of enrolled students has disappointed over the past two years, indicating weak demand for its offerings
- Negative free cash flow raises questions about the return timeline for its investments
- Diminishing returns on capital suggest its earlier profit pools are drying up
Lincoln Educational is trading at $18.26 per share, or 11x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than LINC.
SS&C (SSNC)
Consensus Price Target: $92.99 (17.7% implied return)
Founded in 1986 as a bridge between technology and financial services, SS&C Technologies (NASDAQ: SSNC) provides software and software-enabled services that help financial firms and healthcare organizations automate complex business processes.
Why Do We Think Twice About SSNC?
- Muted 4.9% annual revenue growth over the last five years shows its demand lagged behind its business services peers
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 3 percentage points
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $78.99 per share, SS&C trades at 12.9x forward P/E. Check out our free in-depth research report to learn more about why SSNC doesn’t pass our bar.
One Stock to Buy:
UnitedHealth (UNH)
Consensus Price Target: $552.84 (36.6% implied return)
With over 100 million people served across its various businesses and a workforce of more than 400,000, UnitedHealth Group (NYSE: UNH) operates a health insurance business and Optum, a healthcare services division that provides everything from pharmacy benefits to primary care.
Why Is UNH a Top Pick?
- Unparalleled scale of $410.1 billion in revenue enables it to spread administrative costs across a larger membership base
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- ROIC punches in at 21.6%, illustrating management’s expertise in identifying profitable investments
UnitedHealth’s stock price of $404.83 implies a valuation ratio of 13.1x forward P/E. Is now the time to initiate a position? 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 9 Market-Beating Stocks. 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 Axon (+711% five-year return). Find your next big winner with StockStory today for free.
