ETFOptimize | High-performance ETF-based Investment Strategies

Quantitative strategies, Wall Street-caliber research, and insightful market analysis since 1998.


ETFOptimize | HOME
Close Window

3 of Wall Street’s Favorite Stocks We’re Skeptical Of

WOW Cover Image

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. Keeping that in mind, here are three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.

WideOpenWest (WOW)

Consensus Price Target: $5.65 (46.4% implied return)

Initially started in Denver as a cable television provider, WideOpenWest (NYSE: WOW) provides high-speed internet, cable, and telephone services to the Midwest and Southeast regions of the U.S.

Why Do We Think WOW Will Underperform?

  1. Sluggish trends in its subscribers suggest customers aren’t adopting its solutions as quickly as the company hoped
  2. Negative free cash flow raises questions about the return timeline for its investments
  3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

WideOpenWest is trading at $3.86 per share, or 1.2x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why WOW doesn’t pass our bar.

Cadre (CDRE)

Consensus Price Target: $42.67 (26.6% implied return)

Originally known as Safariland, Cadre (NYSE: CDRE) specializes in manufacturing and distributing safety and survivability equipment for first responders.

Why Does CDRE Give Us Pause?

  1. Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 2 percentage points
  2. Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
  3. Free cash flow margin shrank by 2.9 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Cadre’s stock price of $33.70 implies a valuation ratio of 21.2x forward P/E. Read our free research report to see why you should think twice about including CDRE in your portfolio.

NeoGenomics (NEO)

Consensus Price Target: $11.05 (69% implied return)

Operating a network of CAP-accredited and CLIA-certified laboratories across the United States and United Kingdom, NeoGenomics (NASDAQ: NEO) provides specialized cancer diagnostic testing services, including genetic analysis, molecular testing, and pathology consultation for oncologists and healthcare providers.

Why Should You Dump NEO?

  1. Issuance of new shares over the last five years caused its earnings per share to fall by 12% annually while its revenue grew
  2. Push for growth has led to negative returns on capital, signaling value destruction, and its falling returns suggest its earlier profit pools are drying up
  3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

At $6.54 per share, NeoGenomics trades at 28.7x forward P/E. Dive into our free research report to see why there are better opportunities than NEO.

Stocks We Like More

Donald Trump’s April 2024 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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-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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

Stock Quote API & Stock News API supplied by www.cloudquote.io
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms Of Service.


 

IntelligentValue Home
Close Window

DISCLAIMER

All content herein is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor should it be interpreted as a recommendation to buy, hold or sell (short or otherwise) any security.  All opinions, analyses, and information included herein are based on sources believed to be reliable, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. We undertake no obligation to update such opinions, analysis or information. You should independently verify all information contained on this website. Some information is based on analysis of past performance or hypothetical performance results, which have inherent limitations. We make no representation that any particular equity or strategy will or is likely to achieve profits or losses similar to those shown. Shareholders, employees, writers, contractors, and affiliates associated with ETFOptimize.com may have ownership positions in the securities that are mentioned. If you are not sure if ETFs, algorithmic investing, or a particular investment is right for you, you are urged to consult with a Registered Investment Advisor (RIA). Neither this website nor anyone associated with producing its content are Registered Investment Advisors, and no attempt is made herein to substitute for personalized, professional investment advice. Neither ETFOptimize.com, Global Alpha Investments, Inc., nor its employees, service providers, associates, or affiliates are responsible for any investment losses you may incur as a result of using the information provided herein. Remember that past investment returns may not be indicative of future returns.

Copyright © 1998-2017 ETFOptimize.com, a publication of Optimized Investments, Inc. All rights reserved.