1 of Wall Street's Favorite Stock with Impressive Fundamentals and 2 to Turn Down

Wall Street has set ambitious price targets for the stocks in this article. While this suggests attractive upside potential, it’s important to remain skeptical because analysts face institutional pressures that can sometimes lead to overly optimistic forecasts.

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 is one stock where Wall Street’s positive outlook is supported by strong fundamentals and two where analysts may be overlooking some important risks.

Two Stocks to Sell:

Warner Bros. Discovery (WBD)

Consensus Price Target: $12.98 (60.7% implied return)

Formed from the merger of WarnerMedia and Discovery, Warner Bros. Discovery (NASDAQ:WBD) is a multinational media and entertainment company, offering television networks, streaming services, and film and television production.

Why Are We Out on WBD?

1. Annual revenue declines of 4.5% over the last two years indicate problems with its market positioning
2. Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 17% annually
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

Warner Bros. Discovery’s stock price of $8.26 implies a valuation ratio of 2.1x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why WBD doesn’t pass our bar.

TPI Composites (TPIC)

Consensus Price Target: $3.97 (335% implied return)

Founded in 1968, TPI Composites (NASDAQ:TPIC) manufactures composite wind turbine blades and provides related precision molding and assembly systems.

Why Do We Steer Clear of TPIC?

1. Products, pricing, or go-to-market strategy need some adjustments as its billings have averaged 12.6% declines over the past two years
2. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

TPI Composites is trading at $0.80 per share, or 0.4x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including TPIC in your portfolio.

One Stock to Buy:

GitLab (GTLB)

Consensus Price Target: $79.95 (66.9% implied return)

Founded as an open-source project in 2011, GitLab (NASDAQ:GTLB) is a leading software development tools platform.

Why Is GTLB a Top Pick?

1. ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
2. Customers use its software daily and increase their spending every year, as seen in its 126% net revenue retention rate
3. Software is difficult to replicate at scale and results in a best-in-class gross margin of 88.8%

At $43.99 per share, GitLab trades at 7.5x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.