2 of Wall Street's Favorite Stocks with Exciting Potential and 1 We Turn Down

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.

Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. That said, here are two stocks where Wall Street’s excitement appears well-founded and one where analysts may be overlooking some important risks.

One Stock to Sell:

Xerox (XRX)

Consensus Price Target: $4.50 (16.9% implied return)

Pioneering the modern office copier and inventing technologies like Ethernet and the laser printer, Xerox (NASDAQ:XRX) provides document management systems, printing technology, and workplace solutions to businesses of all sizes across the globe.

Why Are We Out on XRX?

1. Sales tumbled by 4.9% annually over the last five years, showing market trends are working against its favor during this cycle
2. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
3. High net-debt-to-EBITDA ratio of 8× increases the risk of forced asset sales or dilutive financing if operational performance weakens

Xerox is trading at $3.85 per share, or 2.5x forward P/E. If you’re considering XRX for your portfolio, see our FREE research report to learn more.

Two Stocks to Watch:

ServiceNow (NOW)

Consensus Price Target: $1,143 (25.6% implied return)

Built on a single code base that processes over 4 billion workflow transactions daily, ServiceNow (NYSE:NOW) provides a cloud-based platform that helps organizations automate and digitize workflows across departments, from IT and HR to customer service and security.

Why Should You Buy NOW?

1. Demand is healthy as its current remaining performance obligations (cRPO) have averaged 22.9% growth over the last year, showing it’s securing new contracts for services yet to be fulfilled
2. Highly efficient business model is illustrated by its impressive 13.3% operating margin, and its operating leverage amplified its profits over the last year
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

At $909.51 per share, ServiceNow trades at 13.3x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.

BrightSpring Health Services (BTSG)

Consensus Price Target: $28.71 (21.8% implied return)

Founded in 1974, BrightSpring Health Services (NASDAQ:BTSG) offers home health care, hospice, neuro-rehabilitation, and pharmacy services.

Why Could BTSG Be a Winner?

1. Market share has increased this cycle as its 21.3% annual revenue growth over the last two years was exceptional
2. Estimated revenue growth of 10.6% for the next 12 months implies its momentum over the last two years will continue
3. Earnings per share grew by 26.3% annually over the last four years, massively outpacing its peers

BrightSpring Health Services’s stock price of $23.57 implies a valuation ratio of 24.3x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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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