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.

Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. Keeping that in mind, here are three stocks where Wall Street’s estimates seem disconnected from reality and some better opportunities to consider.

Skillz (SKLZ)

Consensus Price Target: $10.75 (40.8% implied return)

Taking a new twist at video gaming, Skillz (NYSE: SKLZ) offers developers a platform to create and distribute mobile games where players can pay fees to compete for cash prizes.

Why Do We Avoid SKLZ?

1. Value proposition isn’t resonating strongly as its paying monthly active users averaged 24.5% drops over the last two years
2. Increased cash burn over the last few years raises questions about the return timeline for its investments
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

Skillz is trading at $7.64 per share, or 1.2x forward price-to-gross profit. Check out our free in-depth research report to learn more about why SKLZ doesn’t pass our bar.

Accel Entertainment (ACEL)

Consensus Price Target: $16 (40.7% implied return)

Established in Illinois, Accel Entertainment (NYSE: ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.

Why Is ACEL Not Exciting?

1. Number of video gaming terminals sold has disappointed over the past two years, indicating weak demand for its offerings
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 6.4%
3. Poor free cash flow margin of 3.8% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends

At $11.37 per share, Accel Entertainment trades at 11.9x forward P/E. Read our free research report to see why you should think twice about including ACEL in your portfolio.

Haemonetics (HAE)

Consensus Price Target: $78.64 (63.1% implied return)

With roots dating back to 1971 and a mission to improve blood-related healthcare, Haemonetics (NYSE: HAE) provides specialized medical devices and software for blood collection, processing, and management across plasma centers, blood banks, and hospitals.

Why Are We Wary of HAE?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Modest revenue base of $1.35 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
3. Estimated sales decline of 2.9% for the next 12 months implies a challenging demand environment

Haemonetics’s stock price of $48.20 implies a valuation ratio of 9.6x forward P/E. If you’re considering HAE for your portfolio, see our FREE research report to learn more.

Stocks We Like More

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