2 of Wall Street's Favorite Stocks to Research Further and 1 to Approach with Caution

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 likely to meet or exceed Wall Street’s lofty expectations and one where analysts may be overlooking some important risks.

One Stock to Sell:

Columbus McKinnon (CMCO)

Consensus Price Target: $27.50 (70.9% implied return)

With 19 different brands across the globe, Columbus McKinnon (NASDAQ:CMCO) offers material handling equipment for the construction, manufacturing, and transportation industries.

Why Do We Pass on CMCO?

1. Muted 1.4% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 2.2% annually while its revenue grew
3. 10.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

Columbus McKinnon’s stock price of $16.09 implies a valuation ratio of 5.9x forward P/E. To fully understand why you should be careful with CMCO, check out our full research report (it’s free).

Two Stocks to Watch:

Photronics (PLAB)

Consensus Price Target: $31 (62.6% implied return)

Sporting a global footprint of facilities, Photronics (NASDAQ:PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.

Why Are We Positive On PLAB?

1. Operating margin improvement of 14.3 percentage points over the last five years demonstrates its ability to scale efficiently
2. Share repurchases over the last five years enabled its annual earnings per share growth of 31.7% to outpace its revenue gains
3. Industry-leading 25.4% return on capital demonstrates management’s skill in finding high-return investments, and its rising returns show it’s making even more lucrative bets

Photronics is trading at $19.06 per share, or 9.2x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.

Reddit (RDDT)

Consensus Price Target: $146.97 (27% implied return)

Founded in 2005 by two University of Virginia roommates, Reddit (NYSE:RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.

Why Should You Buy RDDT?

1. Domestic Daily Active Visitors are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
2. Earnings growth has massively outpaced its peers over the last three years as its EPS has compounded at 31.6% annually
3. Free cash flow margin increased by 38.9 percentage points over the last few years, giving the company more capital to invest or return to shareholders

At $115.70 per share, Reddit trades at 37.6x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 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.