When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as M&A advisory.

At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. Keeping that in mind, here is one stock where you should be greedy instead of fearful and two where the skepticism is well-placed.

Two Stocks to Sell:

The Cheesecake Factory (CAKE)

Consensus Price Target: $55.41 (-4.5% implied return)

Celebrated for its delicious (and free) brown bread, gigantic portions, and delectable desserts, Cheesecake Factory (NASDAQ: CAKE) is an iconic American restaurant chain that also owns and operates a portfolio of separate restaurant brands.

Why Is CAKE Not Exciting?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
2. Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
3. 6× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

The Cheesecake Factory’s stock price of $58 implies a valuation ratio of 15x forward P/E. Check out our free in-depth research report to learn more about why CAKE doesn’t pass our bar.

Cummins (CMI)

Consensus Price Target: $350.36 (7.3% implied return)

With more than half of the heavy-duty truck market using its engines at one point, Cummins (NYSE: CMI) offers engines and power systems.

Why Are We Cautious About CMI?

1. Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 6% over the last two years was below our standards for the industrials sector
2. Free cash flow margin dropped by 10.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up
3. Eroding returns on capital suggest its historical profit centers are aging

Cummins is trading at $326.57 per share, or 11.2x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than CMI.

One Stock to Watch:

LegalZoom (LZ)

Consensus Price Target: $9.79 (6.7% implied return)

Founded by famous lawyer Robert Shapiro, LegalZoom (NASDAQ: LZ) offers online legal services and documentation assistance for individuals and businesses.

Why Does LZ Stand Out?

1. Subscription Units are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
2. Performance over the past three years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
3. Free cash flow margin increased by 13.1 percentage points over the last few years, giving the company more capital to invest or return to shareholders

At $9.17 per share, LegalZoom trades at 9.7x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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.