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1 of Wall Street’s Favorite Stocks for Long-Term Investors and 2 We Find Risky
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.
Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. Keeping that in mind, here is one stock where Wall Street’s excitement appears well-founded and two where analysts may be overlooking some important risks.
Two Stocks to Sell:
Teladoc (TDOC)
Consensus Price Target: $7.74 (22.6% implied return)
Founded to help people in rural areas get online medical consultations, Teladoc Health (NYSE:TDOC) is a telemedicine platform that facilitates remote doctor’s visits.
Why Is TDOC Not Exciting?
- Sales were flat over the last three years, indicating it’s failed to expand its business
- Focus on expanding its platform came at the expense of monetization as its average revenue per user fell by 9.2% annually
- Forecasted revenue decline of 5.1% for the upcoming 12 months implies demand will fall off a cliff
Teladoc is trading at $6.31 per share, or 8.4x forward EV/EBITDA. To fully understand why you should be careful with TDOC, check out our full research report (it’s free).
Herbalife (HLF)
Consensus Price Target: $17 (35.1% implied return)
With the first products sold out of the trunk of the founder’s car, Herbalife (NYSE:HLF) today offers a portfolio of shakes, supplements, personal care products, and weight management programs to help customers reach their nutritional and fitness goals.
Why Does HLF Worry Us?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Anticipated sales growth of 2.1% for the next year implies demand will be shaky
- Revenue growth over the past three years was nullified by the company’s new share issuances as its earnings per share fell by 8.3% annually
Herbalife’s stock price of $12.58 implies a valuation ratio of 4.7x forward P/E. Dive into our free research report to see why there are better opportunities than HLF.
One Stock to Buy:
American Superconductor (AMSC)
Consensus Price Target: $61.75 (112% implied return)
Founded in 1987, American Superconductor (NASDAQ:AMSC) has shifted from superconductor research to developing power systems, adapting to changing energy grid needs and naval technology requirements.
What Makes AMSC Stand Out?
- Impressive 43.6% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Free cash flow margin grew by 25.5 percentage points over the last five years, giving the company more chips to play with
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
At $29.07 per share, American Superconductor trades at 29.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.