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.
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’s estimates seem disconnected from reality and some better opportunities to consider.
8x8 (EGHT)
Consensus Price Target: $2.33 (37.6% implied return)
Founded in 1987, 8x8 (NYSE: EGHT) provides software for organizations to efficiently communicate and collaborate with their customers, employees, and partners.
Why Are We Out on EGHT?
- Offerings couldn’t generate interest over the last year as its billings have averaged 1.4% declines
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions
8x8’s stock price of $1.69 implies a valuation ratio of 0.3x forward price-to-sales. If you’re considering EGHT for your portfolio, see our FREE research report to learn more.
Bausch + Lomb (BLCO)
Consensus Price Target: $14.50 (25% implied return)
With a nearly 170-year history dedicated to vision care and eye health innovation, Bausch + Lomb (NYSE: BLCO) develops and manufactures a comprehensive range of eye health products including contact lenses, pharmaceuticals, surgical devices, and consumer eye care solutions.
Why Are We Wary of BLCO?
- 5.3% annual revenue growth over the last five years was slower than its healthcare peers
- 20.6 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Bausch + Lomb is trading at $11.60 per share, or 14.5x forward P/E. To fully understand why you should be careful with BLCO, check out our full research report (it’s free).
Bio-Techne (TECH)
Consensus Price Target: $69.26 (37.8% implied return)
With a catalog of hundreds of thousands of specialized biological products used in laboratories worldwide, Bio-Techne (NASDAQ: TECH) develops and manufactures specialized reagents, instruments, and services that help researchers study biological processes and enable diagnostic testing and cell therapy development.
Why Does TECH Fall Short?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Revenue base of $1.21 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 8.2 percentage points
At $50.26 per share, Bio-Techne trades at 23.9x forward P/E. Read our free research report to see why you should think twice about including TECH in your portfolio.
Stocks We Like More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
