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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. Keeping that in mind, here are three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.
Sprinklr (CXM)
Consensus Price Target: $10.50 (19.6% implied return)
Initially focused only on social media management, Sprinklr (NYSE: CXM) is a leading provider of unified customer experience management software.
Why Should You Dump CXM?
- Offerings struggled to generate meaningful interest as its average billings growth of 4% over the last year did not impress
- Estimated sales growth of 3.4% for the next 12 months implies demand will slow from its three-year trend
- Efficiency has decreased over the last year as its operating margin fell by 3.6 percentage points
At $8.78 per share, Sprinklr trades at 2.7x forward price-to-sales. Check out our free in-depth research report to learn more about why CXM doesn’t pass our bar.
Pursuit (PRSU)
Consensus Price Target: $41 (37.9% implied return)
With attractions ranging from glacier tours in the Canadian Rockies to an oceanfront geothermal lagoon in Iceland, Pursuit Attractions and Hospitality (NYSE: PRSU) operates iconic travel experiences, experiential marketing services, and exhibition management across North America and Europe.
Why Are We Wary of PRSU?
- Operating margin of 7.7% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
- Earnings per share have dipped by 27.3% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- Negative returns on capital show that some of its growth strategies have backfired
Pursuit is trading at $29.74 per share, or 8.2x forward EV-to-EBITDA. To fully understand why you should be careful with PRSU, check out our full research report (it’s free).
LGI Homes (LGIH)
Consensus Price Target: $93.33 (81.2% implied return)
Based in Texas, LGI Homes (NASDAQ: LGIH) is a homebuilding company specializing in constructing affordable, entry-level single-family homes in desirable communities across the United States.
Why Do We Avoid LGIH?
- Flat backlog over the past two years has disappointed and shows fewer customers signed long-term contracts
- Eroding returns on capital suggest its historical profit centers are aging
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
LGI Homes’s stock price of $51.51 implies a valuation ratio of 6.7x forward P/E. Dive into our free research report to see why there are better opportunities than LGIH.
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 Strong Momentum Stocks for this week. 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 Exlservice (+354% 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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