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. Keeping that in mind, here are three stocks where Wall Street’s estimates seem disconnected from reality and some better opportunities to consider.
Appian (APPN)
Consensus Price Target: $34.83 (22.2% implied return)
Founded by Matt Calkins and his three friends out of an apartment in Northern Virginia, Appian (NASDAQ:APPN) sells a software platform that lets its users build applications without using much code, allowing them to create new software more quickly.
Why Is APPN Not Exciting?
- 17.1% annual revenue growth over the last three years was slower than its software peers
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
- Low free cash flow margin of 4.8% for the last year gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Appian is trading at $28.50 per share, or 3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than APPN.
Wyndham (WH)
Consensus Price Target: $103.30 (28% implied return)
Established in 1981, Wyndham (NYSE:WH) is a global hotel franchising company with over 9,000 hotels across nearly 95 countries on six continents.
Why Does WH Give Us Pause?
- Revenue per room has underperformed over the past two years, suggesting it may need to develop new facilities
- Estimated sales growth of 4.2% for the next 12 months is soft and implies weaker demand
- Underwhelming 9.2% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $80.73 per share, Wyndham trades at 16.3x forward P/E. To fully understand why you should be careful with WH, check out our full research report (it’s free).
Kforce (KFRC)
Consensus Price Target: $50.25 (23% implied return)
With nearly 60 years of matching skilled professionals with the right opportunities, Kforce (NYSE:KFRC) is a professional staffing company that specializes in placing technology and finance experts with businesses on both temporary and permanent bases.
Why Do We Pass on KFRC?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 9.8% annually over the last two years
- Sales over the last five years were less profitable as its earnings per share fell by 11.7% annually while its revenue was flat
- Waning returns on capital imply its previous profit engines are losing steam
Kforce’s stock price of $40.84 implies a valuation ratio of 16.1x forward P/E. Read our free research report to see why you should think twice about including KFRC in your portfolio.
High-Quality Stocks for All Market Conditions
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 Growth Stocks for this month. 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-micro-cap company Tecnoglass (+1,754% 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