2 of Wall Street's Favorite Stocks Worth Investigating and 1 to Turn Down
Wall Street has set ambitious price targets for the stocks in this article. While this suggests attractive upside potential, it's important to remain skeptical because analysts face institutional pressures that can sometimes lead to overly optimistic forecasts.
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 are two stocks where Wall Street's excitement appears well-founded and one where consensus estimates seem disconnected from reality.
Consensus Price Target: 4,563% (67.9% implied return)
Founded in California in 1982, Malibu Boats (NASDAQ:MBUU) is a manufacturer of high-performance sports boats and luxury watercrafts.
Why Is MBUU Risky?
Demand for its offerings was relatively low as its number of boats sold has underwhelmed
Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 29% annually
Waning returns on capital from an already weak starting point displays the inefficacy of management's past and current investment decisions
At $24.50 per share, Malibu Boats trades at 7.6x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than MBUU.
Consensus Price Target: 12,284% (85.7% implied return)
Founded in 2010, Workiva (NYSE:WK) offers software as a service product that makes financial and compliance reporting easier, especially for publicly traded corporations.
Why Could WK Be a Winner?
ARR growth averaged 19.5% over the last year, showing customers are willing to take multi-year bets on its offerings
Sales outlook for the upcoming 12 months implies the business will have more momentum than most peers
Software is difficult to replicate at scale and leads to a stellar gross margin of 76.7%
Workiva is trading at $61.91 per share, or 4x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it's free.
Consensus Price Target: 1,988% (116% implied return)
Born from the 2020 merger of Rubicon Project and Telaria, Magnite (NASDAQ:MGNI) operates the world's largest independent sell-side advertising platform that automates the buying and selling of digital advertising inventory across all channels and formats.
Why Is MGNI a Good Business?
Impressive 33.7% annual revenue growth over the last five years indicates it's winning market share this cycle
Incremental sales significantly boosted profitability as its annual earnings per share growth of 77.3% over the last five years outstripped its revenue performance
Strong free cash flow margin of 24.8% enables it to reinvest or return capital consistently, and its rising cash conversion increases its margin of safety
Magnite's stock price of $9.38 implies a valuation ratio of 9.6x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our in-depth research report, it's free.
The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
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