1 of Wall Street’s Favorite Stocks Worth Investigating and 2 We Brush Off
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:
Simply Good Foods (SMPL)
Consensus Price Target: $14.38 (25.1% implied return)
Best known for its Atkins brand that was inspired by the popular diet of the same name, Simply Good Foods (NASDAQ:SMPL) is a packaged food company whose offerings help customers achieve their healthy eating or weight loss goals.
Why Do We Pass on SMPL?
- Lackluster 5.2% annual revenue growth over the last three years indicates the company is losing ground to competitors
- Estimated sales decline of 8.9% for the next 12 months implies a challenging demand environment
- Efficiency has decreased over the last year as its operating margin fell by 31.9 percentage points
Simply Good Foods’s stock price of $11.50 implies a valuation ratio of 6.8x forward P/E. To fully understand why you should be careful with SMPL, check out our full research report (it’s free).
Warby Parker (WRBY)
Consensus Price Target: $30.46 (29.3% implied return)
Founded in 2010, Warby Parker (NYSE:WRBY) designs, manufactures, and sells eyewear, including prescription glasses, sunglasses, and contact lenses, through its e-commerce platform and physical retail locations.
Why Does WRBY Fall Short?
- Revenue base of $911.6 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Subpar operating margin of -1% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Negative returns on capital show management lost money while trying to expand the business
At $23.55 per share, Warby Parker trades at 49.3x forward P/E. Read our free research report to see why you should think twice about including WRBY in your portfolio.
One Stock to Watch:
MYR Group (MYRG)
Consensus Price Target: $412 (45% implied return)
Constructing electrical and phone lines in the American Midwest dating back to the 1890s, MYR Group (NASDAQ:MYRG) is a specialty contractor in the electrical construction industry.
Why Do We Like MYRG?
- Market share is on track to rise over the next 12 months as its 19.4% projected revenue growth implies demand will accelerate from its two-year trend
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Industry-leading 16.2% return on capital demonstrates management’s skill in finding high-return investments, and its returns are growing as it capitalizes on even better market opportunities
MYR Group is trading at $284.08 per share, or 21.7x forward P/E. Is now the time to initiate a position? Find out in our full 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 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.