1 of Wall Street's Favorite Stock Worth Your Attention and 2 That Underwhelm

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 consensus estimates seem disconnected from reality.

Two Stocks to Sell:

Shoe Carnival (SCVL)

Consensus Price Target: $22 (30.6% implied return)

Known for its playful atmosphere that features carnival elements, Shoe Carnival (NASDAQ:SCVL) is a retailer that sells footwear from mainstream brands for the entire family.

Why Should You Dump SCVL?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
2. Revenue base of $1.15 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
3. 6 percentage point decline in its free cash flow margin over the last year reflects the company’s increased investments to defend its market position

Shoe Carnival is trading at $16.84 per share, or 11.3x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why SCVL doesn’t pass our bar.

CarMax (KMX)

Consensus Price Target: $55.50 (76.5% implied return)

Known for its transparent, customer-centric approach and wide selection of vehicles, Carmax (NYSE:KMX) is the largest automotive retailer in the United States.

Why Do We Think KMX Will Underperform?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Commoditized inventory, bad unit economics, and high competition are reflected in its low gross margin of 10.9%
3. High net-debt-to-EBITDA ratio of 16× could force the company to raise capital at unfavorable terms if market conditions deteriorate

CarMax’s stock price of $31.45 implies a valuation ratio of 11.7x forward P/E. If you’re considering KMX for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Zeta Global (ZETA)

Consensus Price Target: $29.36 (50.2% implied return)

Powered by an AI engine that processes over one trillion consumer signals monthly, Zeta Global (NYSE:ZETA) operates a data-driven cloud platform that helps companies target, connect, and engage with consumers through personalized marketing across channels like email, social media, and video.

Why Is ZETA a Top Pick?

1. Average billings growth of 36.4% over the last year enhances its liquidity and shows there is steady demand for its products
2. Estimated revenue growth of 19% for the next 12 months implies its momentum over the last two years will continue
3. User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs

At $19.55 per share, Zeta Global trades at 3.2x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.

Stocks We Like Even 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 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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