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 enthusiasm may be misplaced and some other investments worth exploring instead.
Nextdoor (KIND)
Consensus Price Target: $2.38 (25.9% implied return)
Helping residents figure out what's happening on their block in real time, Nextdoor (NYSE: KIND) is a social network that connects neighbors with each other and with local businesses.
Why Are We Wary of KIND?
- Modest 6.5% annual growth in weekly active users over the last two years indicates potential challenges in customer acquisition and retention
- Historical EBITDA margin losses point to an inefficient cost structure
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
At $1.89 per share, Nextdoor trades at 3.2x forward price-to-gross profit. Dive into our free research report to see why there are better opportunities than KIND.
Charter (CHTR)
Consensus Price Target: $400.79 (53% implied return)
Operating as Spectrum, Charter (NASDAQ: CHTR) is a leading telecommunications company offering cable television, high-speed internet, and voice services across the United States.
Why Does CHTR Fall Short?
- Number of internet subscribers has disappointed over the past two years, indicating weak demand for its offerings
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- ROIC of 9.8% reflects management’s challenges in identifying attractive investment opportunities
Charter’s stock price of $262 implies a valuation ratio of 6.3x forward P/E. To fully understand why you should be careful with CHTR, check out our full research report (it’s free).
Acadia Healthcare (ACHC)
Consensus Price Target: $31.43 (52.1% implied return)
With a network of over 250 facilities serving patients in 38 states and Puerto Rico, Acadia Healthcare (NASDAQ: ACHC) operates facilities providing mental health and substance use disorder treatment services across the United States.
Why Does ACHC Give Us Pause?
- Disappointing admissions over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 24.8 percentage points
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Acadia Healthcare is trading at $20.66 per share, or 7.5x forward P/E. If you’re considering ACHC for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
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 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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