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1 of Wall Street’s Favorite Stock with Exciting Potential and 2 We Ignore
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. Keeping that in mind, here is one stock where Wall Street’s excitement appears well-founded and two where consensus estimates seem disconnected from reality.
Two Stocks to Sell:
MarineMax (HZO)
Consensus Price Target: $30 (23.3% implied return)
Appropriately headquartered in Clearwater, Florida, MarineMax (NYSE:HZO) sells boats, yachts, and other marine products.
Why Do We Steer Clear of HZO?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Earnings per share have contracted by 54.5% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
- 10× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
MarineMax’s stock price of $24.33 implies a valuation ratio of 34.9x forward P/E. If you’re considering HZO for your portfolio, see our FREE research report to learn more.
Adtalem (ATGE)
Consensus Price Target: $158.25 (52% implied return)
Formerly known as DeVry Education Group, Adtalem Global Education (NYSE:ATGE) is a global provider of workforce solutions and educational services.
Why Do We Think ATGE Will Underperform?
- Annual revenue growth of 12.5% over the last five years was below our standards for the consumer discretionary sector
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 1.2 percentage points over the next year
- ROIC of 10.2% reflects management’s challenges in identifying attractive investment opportunities
At $104.09 per share, Adtalem trades at 2x forward price-to-sales. Check out our free in-depth research report to learn more about why ATGE doesn’t pass our bar.
One Stock to Buy:
Stride (LRN)
Consensus Price Target: $105 (59.7% implied return)
Formerly known as K12, Stride (NYSE:LRN) is an education technology company providing education solutions through digital platforms.
Why Is LRN a Good Business?
- Number of enrollments has surged, pointing to elevated demand
- Free cash flow margin expanded by 7.4 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- Returns on capital are growing as management capitalizes on its market opportunities
Stride is trading at $65.76 per share, or 8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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-small-cap company Comfort Systems (+782% 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.