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 where Wall Street’s positive outlook is supported by strong fundamentals and two where its enthusiasm might be excessive.
Two Stocks to Sell:
Marqeta (MQ)
Consensus Price Target: $5.04 (28% implied return)
Founded by CEO Jason Gardner in 2009, Marqeta (NASDAQ: MQ) is an innovative card issuer that provides companies with the ability to issue and process virtual, physical, and tokenized credit and debit cards.
Why Are We Hesitant About MQ?
- Flat sales over the last three years suggest it must innovate and find new ways to grow
- Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions
- Poor expense management has led to operating losses
At $3.92 per share, Marqeta trades at 3.2x forward price-to-sales. To fully understand why you should be careful with MQ, check out our full research report (it’s free).
Scorpio Tankers (STNG)
Consensus Price Target: $73.09 (88.1% implied return)
Operating one of the youngest fleets in the industry, Scorpio Tankers (NYSE: STNG) is an international provider of marine transportation services, specializing in the shipment of refined petroleum.
Why Does STNG Give Us Pause?
- Performance surrounding its total vessels has lagged its peers
- Projected sales decline of 24.3% over the next 12 months indicates demand will continue deteriorating
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
Scorpio Tankers is trading at $34.45 per share, or 4.8x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than STNG.
One Stock to Watch:
Dynatrace (DT)
Consensus Price Target: $62.10 (42% implied return)
Founded in Austria in 2005, Dynatrace (NYSE: DT) provides companies with software that allows them to monitor the performance of their full technology stack, from software applications to the infrastructure they run on.
Why Do We Like DT?
- ARR growth averaged 18.9% over the last year, showing customers are willing to take multi-year bets on its offerings
- Software is difficult to replicate at scale and leads to a top-tier gross margin of 82.2%
- DT is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Dynatrace’s stock price of $44.15 implies a valuation ratio of 7x forward price-to-sales. Is now the time to initiate a position? See for yourself in our in-depth 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 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 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 Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
