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. Keeping that in mind, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.
Skillz (SKLZ)
Consensus Price Target: $10.25 (44.4% implied return)
Taking a new twist at video gaming, Skillz (NYSE: SKLZ) offers developers a platform to create and distribute mobile games where players can pay fees to compete for cash prizes.
Why Do We Think SKLZ Will Underperform?
- Struggled with new customer acquisition as its paying monthly active users averaged 33.6% declines
- Poor expense management has led to EBITDA margin losses
- Cash burn makes us question whether it can achieve sustainable long-term growth
Skillz is trading at $7.10 per share, or 1.4x forward price-to-gross profit. Read our free research report to see why you should think twice about including SKLZ in your portfolio.
Krispy Kreme (DNUT)
Consensus Price Target: $7.49 (123% implied return)
Famous for its Original Glazed doughnuts and parent company of Insomnia Cookies, Krispy Kreme (NASDAQ: DNUT) is one of the most beloved and well-known fast-food chains in the world.
Why Are We Out on DNUT?
- Earnings per share have dipped by 100% annually over the past three years, which is concerning because stock prices follow EPS over the long term
- Negative free cash flow raises questions about the return timeline for its investments
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $3.35 per share, Krispy Kreme trades at 33.5x forward P/E. If you’re considering DNUT for your portfolio, see our FREE research report to learn more.
Tyson Foods (TSN)
Consensus Price Target: $66.56 (21.5% implied return)
Started as a simple trucking business, Tyson Foods (NYSE: TSN) is one of the world’s largest producers of chicken, beef, and pork.
Why Do We Steer Clear of TSN?
- Sizable revenue base leads to growth challenges as its 1.5% annual revenue increases over the last three years fell short of other consumer staples companies
- Easily substituted products (and therefore stiff competition) result in an inferior gross margin of 7.1% that must be offset through higher volumes
- Earnings per share have contracted by 27.6% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
Tyson Foods’s stock price of $54.80 implies a valuation ratio of 14.6x forward P/E. Dive into our free research report to see why there are better opportunities than TSN.
Stocks We Like More
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 Growth Stocks for this month. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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