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.
Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. That said, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.
Pangaea (PANL)
Consensus Price Target: $9.28 (89.8% implied return)
Established in 1996, Pangaea Logistics (NASDAQ:PANL) specializes in global logistics and transportation services, focusing on the shipment of dry bulk cargoes.
Why Should You Dump PANL?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 5.5% annually over the last two years
- Earnings per share have contracted by 33.9% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
- Free cash flow margin dropped by 9.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up
At $4.89 per share, Pangaea trades at 8.9x forward P/E. Dive into our free research report to see why there are better opportunities than PANL.
Purple (PRPL)
Consensus Price Target: $2.53 (239% implied return)
Founded by two brothers, Purple (NASDAQ:PRPL) creates sleep and home comfort products such as mattresses, pillows, and bedding accessories.
Why Are We Out on PRPL?
- Products and services aren't resonating with the market as its revenue declined by 6.3% annually over the last two years
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Purple is trading at $0.75 per share, or 24.5x forward EV-to-EBITDA. If you’re considering PRPL for your portfolio, see our FREE research report to learn more.
CoreCivic (CXW)
Consensus Price Target: $31.50 (50.6% implied return)
Originally founded in 1983 as the first private prison company in the United States, CoreCivic (NYSE:CXW) operates correctional facilities, detention centers, and residential reentry programs for government agencies across the United States.
Why Do We Avoid CXW?
- Sluggish trends in its average available beds suggest customers aren’t adopting its solutions as quickly as the company hoped
- Earnings per share have dipped by 5.6% annually over the past three years, which is concerning because stock prices follow EPS over the long term
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 10.2 percentage points
CoreCivic’s stock price of $20.91 implies a valuation ratio of 23x forward P/E. Read our free research report to see why you should think twice about including CXW in your portfolio.
Stocks We Like 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 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 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