3 of Wall Street's Favorite Stocks Facing Headwinds

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. That said, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.

Guardant Health (GH)

Consensus Price Target: $59.43 (21.2% implied return)

Pioneering the field of "liquid biopsy" with technology that can identify cancer-specific genetic mutations from a simple blood draw, Guardant Health (NASDAQ:GH) develops blood tests that detect and monitor cancer by analyzing tumor DNA in the bloodstream, helping doctors make treatment decisions without invasive biopsies.

Why Is GH Not Exciting?

1. Issuance of new shares over the last five years caused its earnings per share to fall by 23.7% annually while its revenue grew
2. Negative free cash flow raises questions about the return timeline for its investments
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

At $49.02 per share, Guardant Health trades at 6.6x forward price-to-sales. If you’re considering GH for your portfolio, see our FREE research report to learn more.

Azenta (AZTA)

Consensus Price Target: $41.60 (36.8% implied return)

Serving as the guardian of some of medicine's most valuable materials, Azenta (NASDAQ:AZTA) provides biological sample management, storage, and genomic services that help pharmaceutical and biotechnology companies preserve and analyze critical research materials.

Why Do We Pass on AZTA?

1. Sales tumbled by 6.8% annually over the last five years, showing market trends are working against its favor during this cycle
2. Sales were less profitable over the last five years as its earnings per share fell by 19.9% annually, worse than its revenue declines
3. Negative returns on capital show management lost money while trying to expand the business, and its falling returns suggest its earlier profit pools are drying up

Azenta is trading at $30.41 per share, or 41.4x forward P/E. Dive into our free research report to see why there are better opportunities than AZTA.

Crane NXT (CXT)

Consensus Price Target: $72.83 (31.8% implied return)

Born from a corporate transformation completed in 2023, Crane NXT (NYSE:CXT) provides specialized technology solutions for payment processing, banknote security, and authentication systems for financial institutions and businesses.

Why Are We Hesitant About CXT?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Subscale operations are evident in its revenue base of $1.50 billion, meaning it has fewer distribution channels than its larger rivals
3. Falling earnings per share over the last one years has some investors worried as stock prices ultimately follow EPS over the long term

Crane NXT’s stock price of $55.26 implies a valuation ratio of 12.6x forward P/E. To fully understand why you should be careful with CXT, check out our full research report (it’s free).

Stocks We Like More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

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