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 is one stock likely to meet or exceed Wall Street’s lofty expectations and two where its enthusiasm might be excessive.
Two Stocks to Sell:
1-800-FLOWERS (FLWS)
Consensus Price Target: $10.88 (95.7% implied return)
Founded in 1976, 1-800-FLOWERS (NASDAQ: FLWS) is an online retailer of flowers, gifts, and gourmet foods, serving customers globally.
Why Is FLWS Risky?
- Products and services have few die-hard fans as sales have declined by 9.7% annually over the last two years
- Earnings per share fell by 29.6% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
1-800-FLOWERS’s stock price of $5.45 implies a valuation ratio of 17.5x forward price-to-earnings. Read our free research report to see why you should think twice about including FLWS in your portfolio.
CRA (CRAI)
Consensus Price Target: $211 (43.2% implied return)
Often retained for high-stakes matters with multibillion-dollar implications, CRA International (NASDAQ: CRAI) provides economic, financial, and management consulting services to corporations, law firms, and government agencies for litigation, regulatory proceedings, and business strategy.
Why Does CRAI Fall Short?
- Modest revenue base of $687.4 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- Projected sales decline of 1.2% for the next 12 months points to a tough demand environment ahead
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2.6 percentage points
CRA is trading at $164.50 per share, or 21.7x forward price-to-earnings. To fully understand why you should be careful with CRAI, check out our full research report (it’s free).
One Stock to Buy:
Remitly (RELY)
Consensus Price Target: $26.33 (35.9% implied return)
With Amazon founder Jeff Bezos as an early investor, Remitly (NASDAQ: RELY) is an online platform that enables consumers to safely and quickly send money globally.
Why Will RELY Beat the Market?
- Active Customers have grown by 39.9% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 88.9% annually, topping its revenue gains
- Free cash flow margin increased by 19.3 percentage points over the last few years, giving the company more capital to invest or return to shareholders
At $20.08 per share, Remitly trades at 22x forward EV-to-EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even 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 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
