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1 of Wall Street’s Favorite Stock Worth Your Attention and 2 We Brush Off
Wall Street is overwhelmingly bullish on the stocks in this article, with price targets suggesting significant upside potential. However, it’s worth remembering that analysts rarely issue sell ratings, partly because their firms often seek other business from the same companies they cover.
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 is one stock likely to meet or exceed Wall Street’s lofty expectations and two where consensus estimates seem disconnected from reality.
Two Stocks to Sell:
Floor And Decor (FND)
Consensus Price Target: $77.82 (25.6% implied return)
Operating large, warehouse-style stores, Floor & Decor (NYSE:FND) is a specialty retailer that specializes in hard flooring surfaces for the home such as tiles, hardwood, stone, and laminates.
Why Do We Avoid FND?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Earnings per share fell by 8.3% annually over the last three years while its revenue grew, showing its incremental sales were much less profitable
- ROIC of 8.8% reflects management’s challenges in identifying attractive investment opportunities, and its shrinking returns suggest its past profit sources are losing steam
At $61.94 per share, Floor And Decor trades at 31.7x forward P/E. Read our free research report to see why you should think twice about including FND in your portfolio.
Cognex (CGNX)
Consensus Price Target: $48.65 (33.5% implied return)
Founded in 1981 when computer vision was in its infancy, Cognex (NASDAQ:CGNX) develops machine vision systems and software that help manufacturers and logistics companies automate quality inspection and tracking of products.
Why Should You Dump CGNX?
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 12.9 percentage points
- 10.2 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Waning returns on capital imply its previous profit engines are losing steam
Cognex is trading at $36.46 per share, or 34.2x forward P/E. Check out our free in-depth research report to learn more about why CGNX doesn’t pass our bar.
One Stock to Watch:
Parsons (PSN)
Consensus Price Target: $84.27 (34.9% implied return)
Delivering aerospace technology during the Cold War-era, Parsons (NYSE:PSN) offers engineering, construction, and cybersecurity solutions for the infrastructure and defense sectors.
Why Are We Fans of PSN?
- Market share has increased this cycle as its 13.4% annual revenue growth over the last two years was exceptional
- Operating margin expanded by 2.9 percentage points over the last five years as it scaled and became more efficient
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 19% exceeded its revenue gains over the last two years
Parsons’s stock price of $62.45 implies a valuation ratio of 19x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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-micro-cap company Kadant (+351% 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.