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.
Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. Keeping that in mind, here are three stocks where Wall Street’s estimates seem disconnected from reality and some better opportunities to consider.
Qualys (QLYS)
Consensus Price Target: $149.29 (14% implied return)
Founded in 1999 as one of the first subscription security companies, Qualys (NASDAQ: QLYS) provides organizations with software to assess their exposure to cyber-attacks.
Why Does QLYS Fall Short?
- Average billings growth of 6.1% 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 7.1% for the next 12 months implies demand will slow from its three-year trend
- Free cash flow margin is forecasted to shrink by 1.7 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
Qualys is trading at $123.18 per share, or 7x forward price-to-sales. To fully understand why you should be careful with QLYS, check out our full research report (it’s free).
Teladoc (TDOC)
Consensus Price Target: $11.25 (48.3% implied return)
Founded to help people in rural areas get online medical consultations, Teladoc Health (NYSE: TDOC) is a telemedicine platform that facilitates remote doctor’s visits.
Why Is TDOC Not Exciting?
- Competition may be pulling attention away from its platform as its 6.9% average growth in u.s. integrated care members was choppy
- Key performance metrics have been flashing red recently as its average revenue per user dropped by 3.2% annually while engagement was weak
- Forecasted revenue decline of 2% for the upcoming 12 months implies demand will fall off a cliff
Teladoc’s stock price of $7.10 implies a valuation ratio of 3.8x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why TDOC doesn’t pass our bar.
Amneal (AMRX)
Consensus Price Target: $11.25 (65% implied return)
Founded in 2002 and growing into one of America's largest generic drug producers, Amneal Pharmaceuticals (NASDAQ: AMRX) develops, manufactures, and distributes generic medicines, specialty branded drugs, biosimilars, and injectable products for the U.S. healthcare market.
Why Does AMRX Give Us Pause?
- Free cash flow margin shrank by 7.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $7.07 per share, Amneal trades at 9.2x forward price-to-earnings. To fully understand why you should be careful with AMRX, check out our full research report (it’s free).
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 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.
