3 of Wall Street's Favorite Stocks with Mounting Challenges

Wall Street is overwhelmingly bullish on the stocks in this article, with price targets suggesting significant upside potential. However, it’s worth remembering that analysts rarely issue sell ratings, partly because their firms often seek other business from the same companies they cover.

At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. Keeping that in mind, here are three stocks where Wall Street’s estimates seem disconnected from reality and some better opportunities to consider.

Bandwidth (BAND)

Consensus Price Target: $20.75 (28.7% implied return)

Started in 1999 by David Morken who was later joined by Henry Kaestner as co-founder in 2001, Bandwidth (NASDAQ:BAND) provides thousands of customers with a software platform that uses its own global network to provide phone numbers, voice, and text connectivity.

Why Are We Out on BAND?

1. 13.9% annual revenue growth over the last three years was slower than its software peers
2. Estimated sales growth of 2.8% for the next 12 months implies demand will slow from its three-year trend
3. Sky-high servicing costs result in an inferior gross margin of 38% that must be offset through increased usage

At $16.12 per share, Bandwidth trades at 0.6x forward price-to-sales. If you’re considering BAND for your portfolio, see our FREE research report to learn more.

Lovesac (LOVE)

Consensus Price Target: $30.17 (56.9% implied return)

Known for its oversized, premium beanbags, Lovesac (NASDAQ:LOVE) is a specialty furniture brand selling modular furniture.

Why Does LOVE Fall Short?

1. Muted 1.7% annual revenue growth over the last two years shows its demand lagged behind its consumer discretionary peers
2. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 1% for the last two years
3. Eroding returns on capital suggest its historical profit centers are aging

Lovesac’s stock price of $19.23 implies a valuation ratio of 5.5x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than LOVE.

AdaptHealth (AHCO)

Consensus Price Target: $12.88 (34.1% implied return)

With a network of approximately 680 locations serving patients across all 50 states, AdaptHealth (NASDAQ:AHCO) provides home medical equipment, supplies, and related services to patients with chronic conditions like sleep apnea, diabetes, and respiratory disorders.

Why Do We Think Twice About AHCO?

1. Annual revenue growth of 3.9% over the last two years was below our standards for the healthcare sector
2. Underwhelming 1.2% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

AdaptHealth is trading at $9.60 per share, or 8.7x forward P/E. Check out our free in-depth research report to learn more about why AHCO doesn’t pass our bar.

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 Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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