1 of Wall Street's Favorite Stock to Research Further and 2 We Question

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 is one stock where Wall Street’s excitement appears well-founded and two where its enthusiasm might be excessive.

Two Stocks to Sell:

Scholastic (SCHL)

Consensus Price Target: $35 (32.5% implied return)

Creator of the legendary Scholastic Book Fair, Scholastic (NASDAQ:SCHL) is an international company specializing in children's publishing, education, and media services.

Why Do We Pass on SCHL?

1. Products and services aren't resonating with the market as its revenue declined by 2.3% annually over the last two years
2. ROIC of 6% reflects management’s challenges in identifying attractive investment opportunities, and its falling returns suggest its earlier profit pools are drying up
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

Scholastic is trading at $26.42 per share, or 11.9x forward P/E. To fully understand why you should be careful with SCHL, check out our full research report (it’s free).

Diebold Nixdorf (DBD)

Consensus Price Target: $72.33 (25.6% implied return)

With roots dating back to 1859 and a presence in over 100 countries, Diebold Nixdorf (NYSE:DBD) provides automated self-service technology, software, and services that help banks and retailers digitize their customer transactions.

Why Is DBD Not Exciting?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.9% annually over the last five years
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Push for growth has led to negative returns on capital, signaling value destruction

At $57.59 per share, Diebold Nixdorf trades at 14.6x forward P/E. If you’re considering DBD for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

Perdoceo Education (PRDO)

Consensus Price Target: $40 (40.4% implied return)

Formerly known as Career Education Corporation, Perdoceo Education (NASDAQ:PRDO) is an educational services company that specializes in postsecondary education.

Why Are We Fans of PRDO?

1. Excellent operating margin of 24.9% highlights the efficiency of its business model
2. Robust free cash flow margin of 23% gives it many options for capital deployment
3. Industry-leading 49.7% return on capital demonstrates management’s skill in finding high-return investments

Perdoceo Education’s stock price of $28.50 implies a valuation ratio of 11.7x forward EV-to-EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. 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-micro-cap company Kadant (+351% 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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