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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. That said, here is one stock where Wall Street’s positive outlook is supported by strong fundamentals and two where analysts may be overlooking some important risks.
Two Stocks to Sell:
Health Catalyst (HCAT)
Consensus Price Target: $4.33 (41.6% implied return)
Built on its "Health Catalyst Flywheel" methodology that emphasizes measurable outcomes, Health Catalyst (NASDAQ: HCAT) provides data and analytics technology and services that help healthcare organizations manage their data and drive measurable clinical, financial, and operational improvements.
Why Is HCAT Risky?
- Sales trends were unexciting over the last two years as its 5.4% annual growth was well below the typical software company
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Health Catalyst’s stock price of $3.06 implies a valuation ratio of 0.7x forward price-to-sales. If you’re considering HCAT for your portfolio, see our FREE research report to learn more.
Provident Financial Services (PFS)
Consensus Price Target: $22.63 (22.2% implied return)
Founded in 1839 and serving communities across New Jersey, Pennsylvania, and New York, Provident Financial Services (NYSE: PFS) operates a regional bank providing commercial, residential, and consumer lending alongside wealth management and insurance services.
Why Does PFS Fall Short?
- Net interest margin of 3.2% reflects its high servicing and capital costs
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 7.1% annually
- Flat tangible book value per share over the last five years suggest it must find different ways to enhance shareholder value during this cycle
Provident Financial Services is trading at $18.52 per share, or 0.9x forward P/B. Check out our free in-depth research report to learn more about why PFS doesn’t pass our bar.
One Stock to Watch:
Arlo Technologies (ARLO)
Consensus Price Target: $23.20 (22.4% implied return)
Originally spun off from networking equipment maker Netgear in 2018, Arlo Technologies (NYSE: ARLO) provides cloud-based smart security devices and subscription services that help consumers and businesses monitor and protect their homes, properties, and loved ones.
Why Is ARLO Interesting?
- Operating margin improvement of 13.1 percentage points over the last five years demonstrates its ability to scale efficiently
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 434% annually, topping its revenue gains
- Free cash flow margin grew by 17.4 percentage points over the last five years, giving the company more chips to play with
At $18.96 per share, Arlo Technologies trades at 28.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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
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