3 of Wall Street’s Favorite Stocks Skating on Thin Ice

June 17, 2025 at 00:33 AM EDT

ST Cover Image

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.

Sensata Technologies (ST)

Consensus Price Target: $32.57 (14.1% implied return)

Originally a temperature sensor control maker and a subsidiary of Texas Instruments for 60 years, Sensata Technology Holdings (NYSE: ST) is a leading supplier of analog sensors used in industrial and transportation applications, best known for its dominant position in the tire pressure monitoring systems in cars.

Why Should You Dump ST?

Annual revenue growth of 2.7% over the last five years was below our standards for the semiconductor sector
Sales are projected to tank by 3.6% over the next 12 months as its demand continues evaporating
Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 10.3 percentage points

Sensata Technologies’s stock price of $28.55 implies a valuation ratio of 9x forward P/E. Dive into our free research report to see why there are better opportunities than ST.

FuelCell Energy (FCEL)

Consensus Price Target: $7.38 (7.3% implied return)

Founded in 1969, FuelCell Energy (NASDAQ: FCEL) is a leading manufacturer and developer of carbonate fuel cell technology for stationary power generation.

Why Does FCEL Fall Short?

New orders were hard to come by as its average backlog growth of 6.2% over the past two years underwhelmed
Free cash flow margin dropped by 31 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Short cash runway increases the probability of a capital raise that dilutes existing shareholders

FuelCell Energy is trading at $6.88 per share, or 0.7x forward price-to-sales. Read our free research report to see why you should think twice about including FCEL in your portfolio.

Telephone and Data Systems (TDS)

Consensus Price Target: $50 (47.2% implied return)

Operating primarily through its majority-owned subsidiary UScellular and wholly-owned TDS Telecom, Telephone and Data Systems (NYSE: TDS) provides wireless, broadband, video, and voice communications services to 4.6 million wireless and 1.2 million broadband customers across the United States.

Why Should You Sell TDS?

Sales tumbled by 1.6% annually over the last five years, showing market trends are working against its favor during this cycle
Earnings per share have contracted by 24% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
26× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

At $33.97 per share, Telephone and Data Systems trades at 3x forward EV-to-EBITDA. To fully understand why you should be careful with TDS, check out our full research report (it’s free).

Stocks We Like More

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 6 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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3 of Wall Street’s Favorite Stocks Skating on Thin Ice

Sensata Technologies (ST)

FuelCell Energy (FCEL)

Telephone and Data Systems (TDS)

Stocks We Like More

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