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2 of Wall Street’s Favorite Stocks to Research Further and 1 to Be Wary Of

By: StockStory

July 07, 2025 at 00:40 AM EDT

WK 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.

Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. That said, here are two stocks where Wall Street’s excitement appears well-founded and one where consensus estimates seem disconnected from reality.

One Stock to Sell:

Arcos Dorados (ARCO)

Consensus Price Target: $10.33 (31.4% implied return)

Translating to “Golden Arches” in Spanish, Arcos Dorados (NYSE: ARCO) is the master franchisee of the McDonald's brand in Latin America and the Caribbean, responsible for its operations and growth in over 20 countries.

Why Are We Cautious About ARCO?

Lacking pricing power results in an inferior gross margin of 13.2% that must be offset by turning more tables
Subpar operating margin of 6.9% constrains its ability to invest in process improvements or effectively respond to new competitive threats
Low free cash flow margin of -0.9% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders

Arcos Dorados’s stock price of $7.86 implies a valuation ratio of 0.3x forward price-to-sales. Check out our free in-depth research report to learn more about why ARCO doesn’t pass our bar.

Two Stocks to Watch:

Workiva (WK)

Consensus Price Target: $99.29 (43.4% implied return)

Founded in 2010, Workiva (NYSE: WK) offers software as a service product that makes financial and compliance reporting easier, especially for publicly traded corporations.

Why Does WK Stand Out?

Ability to secure long-term commitments with customers is evident in its 19.5% ARR growth over the last year
Forecasted revenue growth of 16.9% for the next 12 months suggests stronger momentum versus most peers
Software is difficult to replicate at scale and leads to a stellar gross margin of 76.7%

At $69.22 per share, Workiva trades at 4.3x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

Chart (GTLS)

Consensus Price Target: $208.22 (19.9% implied return)

Installing the first bulk Co2 tank for McDonalds’s sodas, Chart (NYSE: GTLS) provides equipment to store and transport gasses.

Why Should You Buy GTLS?

Backlog has averaged 41.6% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
Operating margin expanded by 7.3 percentage points over the last five years as it scaled and became more efficient
Earnings growth has trumped its peers over the last two years as its EPS has compounded at 28.7% annually

Chart is trading at $173.63 per share, or 13.4x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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-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

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