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 are three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.
F5 (FFIV)
Consensus Price Target: $242.86 (11.8% implied return)
Initially started as a hardware appliances company in the late 1990s, F5 (NASDAQ:FFIV) makes software that helps large enterprises ensure their web applications are always available by distributing network traffic and protecting them from cyberattacks.
Why Are We Hesitant About FFIV?
- Muted 2.7% annual revenue growth over the last three years shows its demand lagged behind its software peers
- Offerings struggled to generate meaningful interest as its average billings growth of 4.5% over the last year did not impress
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.3%
At $263.18 per share, F5 trades at 5.1x forward price-to-sales. To fully understand why you should be careful with FFIV, check out our full research report (it’s free).
Covenant Logistics (CVLG)
Consensus Price Target: $35.67 (74.8% implied return)
Started with 25 trucks and 50 trailers, Covenant Logistics (NASDAQ:CVLG) is a provider of expedited long haul freight services, offering a range of logistics solutions.
Why Do We Pass on CVLG?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3.6% annually over the last two years
- Earnings per share have dipped by 17.8% annually over the past two 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 22.2 percentage points
Covenant Logistics’s stock price of $19.45 implies a valuation ratio of 8.1x forward price-to-earnings. Read our free research report to see why you should think twice about including CVLG in your portfolio.
Schneider (SNDR)
Consensus Price Target: $31.94 (22.7% implied return)
Employing thousands of drivers across the country to make deliveries, Schneider (NYSE:SNDR) makes full truckload and intermodal deliveries regionally and across borders.
Why Should You Sell SNDR?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 10.5% annually over the last two years
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 11% annually
- Waning returns on capital imply its previous profit engines are losing steam
Schneider is trading at $22.39 per share, or 19.9x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than SNDR.
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 9 Market-Beating Stocks. 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.