Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. That said, here is one stock poised to prove Wall Street wrong and two where the outlook is warranted.
Two Stocks to Sell:
Shake Shack (SHAK)
Consensus Price Target: $114.62 (-10.1% implied return)
Started as a hot dog cart in New York City's Madison Square Park, Shake Shack (NYSE:SHAK) is a fast-food restaurant known for its burgers and milkshakes.
Why Are We Cautious About SHAK?
- Operating margin of 0.6% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Negative returns on capital show that some of its growth strategies have backfired
Shake Shack’s stock price of $127.50 implies a valuation ratio of 97.2x forward P/E. To fully understand why you should be careful with SHAK, check out our full research report (it’s free).
Beyond Meat (BYND)
Consensus Price Target: $2.75 (-16.8% implied return)
A pioneer at the forefront of the plant-based protein revolution, Beyond Meat (NASDAQ:BYND) is a food company specializing in alternatives to traditional meat products.
Why Is BYND Risky?
- Shrinking unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Beyond Meat is trading at $3.31 per share, or 0.8x forward price-to-sales. Check out our free in-depth research report to learn more about why BYND doesn’t pass our bar.
One Stock to Buy:
Super Micro (SMCI)
Consensus Price Target: $42.93 (2.7% implied return)
Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ:SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Why Is SMCI a Top Pick?
- Annual revenue growth of 81.1% over the last two years was superb and indicates its market share increased during this cycle
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 23.2% annually
- Rising returns on capital show management is finding more attractive investment opportunities
At $41.82 per share, Super Micro trades at 13.5x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
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 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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.