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 consensus estimates seem disconnected from reality.
Two Stocks to Sell:
American Outdoor Brands (AOUT)
Consensus Price Target: $12.50 (30.1% implied return)
Spun off from Smith and Wesson in 2020, American Outdoor Brands (NASDAQ: AOUT) is an outdoor and recreational products company that offers outdoor and shooting sports products but does not sell firearms themselves.
Why Are We Out on AOUT?
- Sales tumbled by 4.3% annually over the last five years, showing consumer trends are working against its favor
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 1.3% for the last two years
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
American Outdoor Brands’s stock price of $9.61 implies a valuation ratio of 36.2x forward P/E. Read our free research report to see why you should think twice about including AOUT in your portfolio.
Omnicell (OMCL)
Consensus Price Target: $57.43 (62.1% implied return)
Driven by the vision of an "Autonomous Pharmacy" with zero medication errors, Omnicell (NASDAQ: OMCL) provides medication management automation and adherence tools that help healthcare systems and pharmacies reduce errors and improve efficiency.
Why Do We Think OMCL Will Underperform?
- Muted 1.6% annual revenue growth over the last two years shows its demand lagged behind its healthcare peers
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 9.2 percentage points
- Earnings per share fell by 8.6% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
At $35.42 per share, Omnicell trades at 20.4x forward P/E. If you’re considering OMCL for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
FuelCell Energy (FCEL)
Consensus Price Target: $8.24 (23.8% implied return)
Founded in 1969, FuelCell Energy (NASDAQ: FCEL) is a leading manufacturer and developer of carbonate fuel cell technology for stationary power generation.
Why Is FCEL a Top Pick?
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Earnings per share grew by 31.9% annually over the last two years, massively outpacing its peers
- Cash burn has decreased over the last five years, showing the company is becoming a more self-sustaining business
FuelCell Energy is trading at $6.66 per share, or 1.6x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it's flagging for this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
