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.
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 may be overlooking some important risks and some alternatives with better fundamentals.
DigitalOcean (DOCN)
Consensus Price Target: $38.82 (32.9% implied return)
Started by brothers Ben and Moisey Uretsky, DigitalOcean (NYSE: DOCN) provides a simple, low-cost platform that allows developers and small and medium-sized businesses to host applications and data in the cloud.
Why Does DOCN Give Us Pause?
- Competitive market dynamics make it difficult to retain customers, leading to a weak 98.2% net revenue retention rate
- Gross margin of 59.9% is way below its competitors, leaving less money to invest in areas like marketing and R&D
DigitalOcean’s stock price of $29.21 implies a valuation ratio of 3.3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than DOCN.
Liberty Broadband (LBRDK)
Consensus Price Target: $109.33 (62.8% implied return)
Operating across the United States, Liberty Broadband (NASDAQ: LBRDK) is a provider of high-speed internet, cable television, and telecommunications services across various markets.
Why Are We Hesitant About LBRDK?
- Muted 2.7% annual revenue growth over the last two 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 39.4 percentage points
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Liberty Broadband is trading at $67.14 per share, or 38.6x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why LBRDK doesn’t pass our bar.
Vimeo (VMEO)
Consensus Price Target: $6.85 (65.9% implied return)
Originally launched in 2004 as a platform for filmmakers seeking a high-quality alternative to YouTube, Vimeo (NASDAQ: VMEO) provides cloud-based video creation, editing, hosting, and distribution software that helps businesses and creators make, manage, and share professional-quality videos.
Why Is VMEO Not Exciting?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.5% annually over the last two years
- Modest revenue base of $415.1 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- Push for growth has led to negative returns on capital, signaling value destruction
At $4.13 per share, Vimeo trades at 22.1x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including VMEO in your portfolio.
Stocks We Like More
Donald Trump’s April 2025 "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 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
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