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 are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.
Salesforce (CRM)
Consensus Price Target: $364.09 (25.5% implied return)
Launched in 1999 from a rented one-bedroom apartment in San Francisco by Marc Benioff and his three co-founders, Salesforce (NYSE:CRM) is a software-as-a-service platform that helps companies access, manage, and share sales information such as leads.
Why Does CRM Worry Us?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 12.7% over the last three years was below our standards for the software sector
- Average billings growth of 8.1% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Estimated sales growth of 7.6% for the next 12 months implies demand will slow from its three-year trend
Salesforce’s stock price of $290.07 implies a valuation ratio of 6.9x forward price-to-sales. If you’re considering CRM for your portfolio, see our FREE research report to learn more.
Advance Auto Parts (AAP)
Consensus Price Target: $40.40 (22.5% implied return)
Founded in Virginia in 1932, Advance Auto Parts (NYSE:AAP) is an auto parts and accessories retailer that sells everything from carburetors to motor oil to car floor mats.
Why Do We Steer Clear of AAP?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Operating profits fell over the last year as its sales dropped and it struggled to adjust its fixed costs
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Advance Auto Parts is trading at $32.98 per share, or 20.7x forward P/E. Check out our free in-depth research report to learn more about why AAP doesn’t pass our bar.
Dentsply Sirona (XRAY)
Consensus Price Target: $18.14 (10.3% implied return)
With roots dating back to 1877 when it introduced the first dental electric drill, Dentsply Sirona (NASDAQ:XRAY) manufactures and sells professional dental equipment, technologies, and consumable products used by dentists and specialists worldwide.
Why Is XRAY Risky?
- Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $16.45 per share, Dentsply Sirona trades at 8.7x forward P/E. Read our free research report to see why you should think twice about including XRAY in your portfolio.
Stocks We Like 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 176% over the last five years.
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.