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. That said, 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:
Sprout Social (SPT)
Consensus Price Target: $9.60 (73.9% implied return)
Born from the recognition that businesses needed a centralized way to handle their growing social media presence, Sprout Social (NASDAQ: SPT) provides a comprehensive software platform that helps businesses manage, analyze, and optimize their presence across various social media networks.
Why Are We Wary of SPT?
- Products, pricing, or go-to-market strategy may need some adjustments as its 8.7% average billings growth over the last year was weak
- Estimated sales growth of 7.8% for the next 12 months implies demand will slow from its two-year trend
- Rapid expansion strategy came at the expense of operating margin profitability
At $5.52 per share, Sprout Social trades at 0.7x forward price-to-sales. To fully understand why you should be careful with SPT, check out our full research report (it’s free).
Compass (COMP)
Consensus Price Target: $13.58 (82.5% implied return)
Fueled by its mission to replace the "paper-driven, antiquated workflow" of buying a house, Compass (NYSE: COMP) is a digital-first company operating a residential real estate brokerage in the United States.
Why Does COMP Worry Us?
- Performance surrounding its transactions has lagged its peers
- Historical operating margin losses point to an inefficient cost structure
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
Compass is trading at $7.44 per share, or 12.7x forward P/E. Dive into our free research report to see why there are better opportunities than COMP.
One Stock to Buy:
Natera (NTRA)
Consensus Price Target: $258.58 (22.4% implied return)
Founded in 2003 as Gene Security Network before rebranding in 2012, Natera (NASDAQ: NTRA) develops and commercializes genetic tests for prenatal screening, cancer detection, and organ transplant monitoring using its proprietary cell-free DNA technology.
Why Will NTRA Outperform?
- Products are seeing elevated demand as its tests processed averaged 19.5% growth over the past two years
- Adjusted operating profits and efficiency rose over the last two years as it benefited from some fixed cost leverage
- Free cash flow profile has moved into positive territory over the last five years, showing the company has crossed a key inflection point
Natera’s stock price of $211.23 implies a valuation ratio of 11.3x forward price-to-sales. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
