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 estimates seem disconnected from reality and some better opportunities to consider.
C3.ai (AI)
Consensus Price Target: $29.43 (25.3% implied return)
Founded in 2009 by enterprise software veteran Tom Seibel, C3.ai (NYSE: AI) provides software that makes it easy for organizations to add artificial intelligence technology to their applications.
Why Are We Hesitant About AI?
- Annual revenue growth of 15.5% over the last three years was below our standards for the software sector
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
- Poor expense management has led to operating margin losses
C3.ai’s stock price of $23.48 implies a valuation ratio of 6.7x forward price-to-sales. Check out our free in-depth research report to learn more about why AI doesn’t pass our bar.
El Pollo Loco (LOCO)
Consensus Price Target: $14 (33.5% implied return)
With a name that translates into ‘The Crazy Chicken’, El Pollo Loco (NASDAQ: LOCO) is a fast food chain known for its citrus-marinated, fire-grilled chicken recipe that hails from the coastal town of Sinaloa, Mexico.
Why Should You Dump LOCO?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants
- Modest revenue base of $479.7 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4%
El Pollo Loco is trading at $10.49 per share, or 12.2x forward P/E. If you’re considering LOCO for your portfolio, see our FREE research report to learn more.
Byrna (BYRN)
Consensus Price Target: $38.50 (73.3% implied return)
Providing civilians with tools to disable, disarm, and deter would-be assailants, Byrna (NASDAQ: BYRN) is a provider of non-lethal weapons.
Why Does BYRN Worry Us?
- Historical operating margin losses point to an inefficient cost structure
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
At $22.22 per share, Byrna trades at 49.7x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including BYRN in your portfolio.
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 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
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