3 of Wall Street's Favorite Stocks Skating on Thin Ice

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.

Elastic (ESTC)

Consensus Price Target: $111.59 (37.6% implied return)

Started by Shay Banon as a search engine for his wife's growing list of recipes at Le Cordon Bleu cooking school in Paris, Elastic (NYSE:ESTC) helps companies integrate search into their products and monitor their cloud infrastructure.

Why Does ESTC Give Us Pause?

1. Annual revenue growth of 19.8% over the last three years was below our standards for the software sector
2. Historical operating margin losses point to an inefficient cost structure
3. Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 1.7 percentage points

Elastic’s stock price of $81.10 implies a valuation ratio of 5.1x forward price-to-sales. If you’re considering ESTC for your portfolio, see our FREE research report to learn more.

Ingram Micro (INGM)

Consensus Price Target: $24.08 (24.6% implied return)

Operating as the crucial link in the global technology supply chain with a presence in 57 countries, Ingram Micro (NYSE:INGM) is a global technology distributor that connects manufacturers with resellers, providing hardware, software, cloud services, and logistics expertise.

Why Do We Avoid INGM?

1. Flat sales over the last two years suggest it must find different ways to grow during this cycle
2. Earnings per share have contracted by 9.8% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
3. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 0.5% for the last five years

At $19.32 per share, Ingram Micro trades at 6.4x forward P/E. Read our free research report to see why you should think twice about including INGM in your portfolio.

NBT Bancorp (NBTB)

Consensus Price Target: $50.40 (24.9% implied return)

Tracing its roots back to 1856 when it first opened its doors in Norwich, New York, NBT Bancorp (NASDAQ:NBTB) is a community-oriented financial institution providing banking, wealth management, and insurance services to individuals and businesses across the northeastern United States.

Why Does NBTB Fall Short?

1. 6.7% annual net interest income growth over the last four years was slower than its bank peers
2. Performance over the past five years shows its incremental sales were less profitable, as its 1% annual earnings per share growth trailed its revenue gains
3. Capital trends were unexciting over the last two years as its 7.2% annual tangible book value per share growth was below the typical bank company

NBT Bancorp is trading at $40.35 per share, or 1.1x forward P/B. To fully understand why you should be careful with NBTB, check out our full research report (it’s free).

High-Quality Stocks for All Market Conditions

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 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 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-micro-cap company Kadant (+351% 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