The stocks in this article have caught Wall Street’s attention in a big way, with price targets implying returns above 20%. But investors should take these forecasts with a grain of salt because analysts typically say nice things about companies so their firms can win business in other product lines like M&A advisory.

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.

Sweetgreen (SG)

Consensus Price Target: $40.40 (44.1% implied return)

Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE:SG) is a casual quick service chain known for its healthy salads and bowls.

Why Do We Think Twice About SG?

1. Poor expense management has led to operating losses

2. Cash-burning history makes us doubt the long-term viability of its business model

3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

Sweetgreen’s stock price of $22.20 implies a valuation ratio of 72.7x forward EV-to-EBITDA. If you’re considering SG for your portfolio, see our FREE research report to learn more .

European Wax Center (EWCZ)

Consensus Price Target: $8.06 (64.8% implied return)

Founded by two siblings, European Wax Center (NASDAQ:EWCZ) is a beauty and waxing salon chain specializing in professional wax services and skincare products.

Why Is EWCZ Not Exciting?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and in-store experience

2. Sales are projected to tank by 2.4% over the next 12 months as demand evaporates

3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

European Wax Center is trading at $3.83 per share, or 10.1x forward price-to-earnings. Read our free research report to see why you should think twice about including EWCZ in your portfolio, it’s free .

ePlus (PLUS)

Consensus Price Target: $88 (33% implied return)

Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ:PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.

Why Does PLUS Fall Short?

1. Annual revenue growth of 2.4% over the last two years was below our standards for the business services sector

2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital