3 of Wall Street's Favorite Stocks with Open Questions

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 are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.

Salesforce (CRM)

Consensus Price Target: $346.58 (39.8% implied return)

With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce (NYSE:CRM) provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.

Why Are We Wary of CRM?

1. Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 11.4% for the last three years
2. Average ARR growth of 8.7% over the last year has disappointed, suggesting it’s had a hard time winning long-term deals and renewals
3. Estimated sales growth of 9.1% for the next 12 months implies demand will slow from its three-year trend

Salesforce is trading at $247.87 per share, or 5.7x forward price-to-sales. If you’re considering CRM for your portfolio, see our FREE research report to learn more.

Twilio (TWLO)

Consensus Price Target: $131.31 (24.6% implied return)

Known for the clever "Twilio Magic" demo that had developers creating functioning communications apps in minutes, Twilio (NYSE:TWLO) provides a platform that enables businesses to communicate with their customers through voice, messaging, email, and other digital channels.

Why Are We Cautious About TWLO?

1. Sales trends were unexciting over the last three years as its 11.6% annual growth was below the typical software company
2. Estimated sales growth of 8.5% for the next 12 months implies demand will slow from its three-year trend
3. Gross margin of 50% is way below its competitors, leaving less money to invest in areas like marketing and R&D

At $105.40 per share, Twilio trades at 3.3x forward price-to-sales. Read our free research report to see why you should think twice about including TWLO in your portfolio.

Corcept (CORT)

Consensus Price Target: $134.50 (89.6% implied return)

Focusing on the powerful stress hormone that affects everything from metabolism to immune function, Corcept Therapeutics (NASDAQ:CORT) develops and markets medications that modulate cortisol to treat endocrine disorders, cancer, and neurological diseases.

Why Does CORT Fall Short?

1. Efficiency has decreased over the last five years as its adjusted operating margin fell by 16.9 percentage points
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 2.8% annually while its revenue grew
3. Waning returns on capital imply its previous profit engines are losing steam

Corcept’s stock price of $70.93 implies a valuation ratio of 39.6x forward P/E. To fully understand why you should be careful with CORT, check out our full research report (it’s free).

Stocks We Like More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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-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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