Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. Keeping that in mind, here is one stock where Wall Street’s pessimism is creating a buying opportunity and two where the outlook is warranted.
Two Stocks to Sell:
Envista (NVST)
Consensus Price Target: $30.57 (9.1% implied return)
Uniting more than 30 trusted brands including Nobel Biocare, Ormco, and DEXIS under one corporate umbrella, Envista Holdings (NYSE: NVST) is a global dental products company that provides equipment, consumables, and specialized technologies for dental professionals.
Why Are We Bearish on NVST?
- 3.4% annual revenue growth over the last five years was slower than its healthcare peers
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 7% annually
- Negative returns on capital show that some of its growth strategies have backfired, and its shrinking returns suggest its past profit sources are losing steam
Envista’s stock price of $28.02 implies a valuation ratio of 17.5x forward P/E. If you’re considering NVST for your portfolio, see our FREE research report to learn more.
OneMain (OMF)
Consensus Price Target: $69.57 (7.1% implied return)
Dating back to 1912 and formerly known as Springleaf, OneMain Holdings (NYSE: OMF) provides personal loans, auto financing, and credit cards to nonprime consumers who have limited access to traditional banking services.
Why Are We Hesitant About OMF?
- 5.5% annual revenue growth over the last five years was slower than its financials peers
- Earnings per share fell by 9.3% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
OneMain is trading at $64.95 per share, or 8.3x forward P/E. Read our free research report to see why you should think twice about including OMF in your portfolio.
One Stock to Buy:
Oscar Health (OSCR)
Consensus Price Target: $28.20 (1% implied return)
Founded in 2012 to simplify the notoriously complex American healthcare system, Oscar Health (NYSE: OSCR) is a technology-focused health insurance company that offers individual and small group health plans through its cloud-native platform.
What Makes OSCR Stand Out?
- Impressive 45.5% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Earnings per share grew by 37.4% annually over the last five years and trumped its peers
- Free cash flow margin expanded by 23.8 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $27.91 per share, Oscar Health trades at 16.3x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
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