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.
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 excitement appears well-founded and two where analysts may be overlooking some important risks.
Two Stocks to Sell:
Nature's Sunshine (NATR)
Consensus Price Target: $33 (25.6% implied return)
Started on a kitchen table in Utah, Nature’s Sunshine (NASDAQ: NATR) manufactures and sells nutritional and personal care products.
Why Is NATR Not Exciting?
- Sales trends were unexciting over the last three years as its 4.4% annual growth was below the typical consumer staples company
- Subscale operations are evident in its revenue base of $480.1 million, meaning it has fewer distribution channels than its larger rivals
- Operating margin of 4.8% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
Nature's Sunshine is trading at $26.27 per share, or 23.5x forward P/E. If you’re considering NATR for your portfolio, see our FREE research report to learn more.
First Advantage (FA)
Consensus Price Target: $15 (24.2% implied return)
Processing over 200 million screens annually across more than 200 countries and territories, First Advantage (NASDAQ: FA) provides employment background screening, identity verification, and compliance solutions to help companies manage hiring risks.
Why Are We Hesitant About FA?
- Flat earnings per share over the last four years lagged its peers
- Free cash flow margin dropped by 8.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its decreasing returns suggest its historical profit centers are aging
First Advantage’s stock price of $12.08 implies a valuation ratio of 9.8x forward P/E. Read our free research report to see why you should think twice about including FA in your portfolio.
One Stock to Watch:
ResMed (RMD)
Consensus Price Target: $292.33 (30.1% implied return)
Founded in 1989 to address the then-underdiagnosed condition of sleep apnea, ResMed (NYSE: RMD) develops cloud-connected medical devices and software solutions that treat sleep apnea, COPD, and other respiratory disorders for home and clinical use.
Why Do We Like RMD?
- Constant currency growth averaged 9% over the past two years, showing it can expand globally regardless of the macroeconomic environment
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 14.2% annually, topping its revenue gains
- Free cash flow margin expanded by 19.7 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $224.75 per share, ResMed trades at 19.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it's flagging for this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
