3 of Wall Street's Favorite Stocks We Think Twice About

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.

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.

Sensata Technologies (ST)

Consensus Price Target: $38.73 (29.5% implied return)

Originally a temperature sensor control maker and a subsidiary of Texas Instruments for 60 years, Sensata Technology Holdings (NYSE: ST) is a leading supplier of analog sensors used in industrial and transportation applications, best known for its dominant position in the tire pressure monitoring systems in cars.

Why Should You Sell ST?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.3% annually over the last two years
2. Gross margin of 30.6% is below its competitors, leaving less money to invest in areas like marketing and R&D
3. ROIC of 6.2% reflects management’s challenges in identifying attractive investment opportunities, and its falling returns suggest its earlier profit pools are drying up

At $29.91 per share, Sensata Technologies trades at 8.8x forward P/E. Dive into our free research report to see why there are better opportunities than ST.

Matrix Service (MTRX)

Consensus Price Target: $16.50 (31.3% implied return)

Founded in Oklahoma, Matrix Service (NASDAQ:MTRX) provides engineering, fabrication, construction, and maintenance services primarily to the energy and industrial markets.

Why Should You Dump MTRX?

1. Sales tumbled by 6.9% annually over the last five years, showing market trends are working against its favor during this cycle
2. High input costs result in an inferior gross margin of 3.9% that must be offset through higher volumes
3. Issuance of new shares over the last five years caused its earnings per share to fall by 34.8% annually, even worse than its revenue declines

Matrix Service is trading at $12.57 per share, or 27.9x forward P/E. Check out our free in-depth research report to learn more about why MTRX doesn’t pass our bar.

FactSet (FDS)

Consensus Price Target: $339.25 (17.5% implied return)

Founded in 1978 when financial data was still primarily delivered through paper reports, FactSet (NYSE:FDS) provides financial data, analytics, and technology solutions that investment professionals use to research, analyze, and manage their portfolios.

Why Are We Cautious About FDS?

1. 5.5% annual revenue growth over the last two years was slower than its financials peers
2. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 8.1% annually

FactSet’s stock price of $288.68 implies a valuation ratio of 16.5x forward P/E. If you’re considering FDS for your portfolio, see our FREE research report to learn more.

Stocks We Like 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 6 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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