3 of Wall Street's Favorite Stocks We Find Risky

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.

At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. That said, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.

The Marzetti Company (MZTI)

Consensus Price Target: $197.20 (21.7% implied return)

Known for its frozen garlic bread and Parkerhouse rolls, The Marzetti Company (NASDAQ:MZTI) sells bread, dressing, and dips to the retail and food service channels.

Why Are We Hesitant About MZTI?

1. Lackluster 4% annual revenue growth over the last three years indicates the company is losing ground to competitors
2. Estimated sales growth of 1.8% for the next 12 months implies demand will slow from its three-year trend
3. Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 23.4%

The Marzetti Company’s stock price of $162.04 implies a valuation ratio of 22.2x forward P/E. Check out our free in-depth research report to learn more about why MZTI doesn’t pass our bar.

H&R Block (HRB)

Consensus Price Target: $55 (31.4% implied return)

Founded in 1955 by brothers Henry W. Bloch and Richard A. Bloch, H&R Block (NYSE:HRB) is a tax preparation company offering professional tax assistance and financial solutions to individuals and small businesses.

Why Do We Steer Clear of HRB?

1. 5.3% annual revenue growth over the last five years was slower than its consumer discretionary peers
2. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
3. Returns on capital haven’t budged, indicating management couldn’t drive additional value creation

H&R Block is trading at $41.87 per share, or 8.5x forward P/E. If you’re considering HRB for your portfolio, see our FREE research report to learn more.

First American Financial (FAF)

Consensus Price Target: $76.80 (21.8% implied return)

Tracing its roots back to 1889 when California was experiencing its first major real estate boom, First American Financial (NYSE:FAF) provides title insurance, settlement services, and risk solutions for residential and commercial real estate transactions across the United States and internationally.

Why Should You Sell FAF?

1. Muted 1.2% annual revenue growth over the last five years shows its demand lagged behind its insurance peers
2. Net premiums earned plateaued over the last five years, signaling weak incremental demand for its insurance policies
3. Flat earnings per share over the last five years underperformed the sector average

At $63.08 per share, First American Financial trades at 1.1x forward P/B. Dive into our free research report to see why there are better opportunities than FAF.

Stocks We Like More

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% 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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