Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. Keeping that in mind, here are two stocks where you should be greedy instead of fearful and one facing legitimate challenges.
One Stock to Sell:
OneWater (ONEW)
Consensus Price Target: $16.75 (12% implied return)
A public company since early 2020, OneWater Marine (NASDAQ: ONEW) sells boats, yachts, and other marine products.
Why Are We Wary of ONEW?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Earnings per share have contracted by 54.5% annually over the last four years, a headwind for returns as stock prices often echo long-term EPS performance
- 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $14.96 per share, OneWater trades at 8.3x forward P/E. Check out our free in-depth research report to learn more about why ONEW doesn’t pass our bar.
Two Stocks to Watch:
Zscaler (ZS)
Consensus Price Target: $302.38 (0.8% implied return)
After successfully selling all four of his previous cybersecurity companies, Jay Chaudhry's fifth venture, Zscaler (NASDAQ: ZS) offers software-as-a-service that helps companies securely connect to applications and networks in the cloud.
Why Do We Like ZS?
- Customers view its software as mission-critical to their operations as its ARR has averaged 24.5% growth over the last year
- Projected revenue growth of 19.9% for the next 12 months suggests its momentum from the last three years will persist
- ZS is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Zscaler’s stock price of $300 implies a valuation ratio of 15.3x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Lennox (LII)
Consensus Price Target: $559.17 (1.6% implied return)
Based in Texas and founded over a century ago, Lennox (NYSE: LII) is a climate control solutions company offering heating, ventilation, air conditioning, and refrigeration (HVACR) goods.
Why Could LII Be a Winner?
- Excellent operating margin of 16.1% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 24.3% annually
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Lennox is trading at $550.21 per share, or 23.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. 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 Comfort Systems (+782% 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.
