1 of Wall Street’s Favorite Stock to Target This Week and 2 to Be Wary Of

1 of Wall Street’s Favorite Stock to Target This Week and 2 to Be Wary Of

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. Keeping that in mind, here is one stock likely to meet or exceed Wall Street’s lofty expectations and two where its enthusiasm might be excessive.

Two Stocks to Sell:

Yext (YEXT)

Consensus Price Target: $8.50 (41.9% implied return)

Founded in 2006 by Howard Lerman, Yext (NYSE:YEXT) offers software as a service that helps their clients manage and monitor their online listings and customer reviews across all relevant databases, from Google Maps to Alexa or Siri.

Why Are We Out on YEXT?

  1. Customers were hesitant to make long-term commitments to its platform as its 4% average ARR growth over the last year was sluggish

  2. Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue

  3. Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 6.2 percentage points

At $5.99 per share, Yext trades at 1.7x forward price-to-sales. To fully understand why you should be careful with YEXT, check out our full research report (it’s free) .

Universal Logistics (ULH)

Consensus Price Target: $44 (37.5% implied return)

Founded in 1932, Universal Logistics (NASDAQ:ULH) is a provider of customized transportation and logistics solutions operating throughout the United States and in Mexico, Canada, and Colombia.

Why Do We Steer Clear of ULH?

  1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.3% annually over the last two years

  2. Earnings per share have dipped by 18.5% annually over the past two years, which is concerning because stock prices follow EPS over the long term

  3. 11.9 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

Universal Logistics’s stock price of $26.90 implies a valuation ratio of 5.7x forward price-to-earnings. Check out our free in-depth research report to learn more about why ULH doesn’t pass our bar .

One Stock to Buy:

Quanta (PWR)

Consensus Price Target: $346.87 (24.7% implied return)

A construction engineering services company, Quanta (NYSE:PWR) provides infrastructure solutions to a variety of sectors, including energy and communications.

OK