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.
Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. 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:
AeroVironment (AVAV)
Consensus Price Target: $309.88 (67.2% implied return)
Focused on the future of autonomous military combat, AeroVironment (NASDAQ: AVAV) specializes in advanced unmanned aircraft systems and electric vehicle charging solutions.
Why Are We Cautious About AVAV?
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 15.3 percentage points
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 8.4% annually while its revenue grew
- Free cash flow margin shrank by 6.3 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
AeroVironment is trading at $185.30 per share, or 50x forward P/E. If you’re considering AVAV for your portfolio, see our FREE research report to learn more.
Labcorp (LH)
Consensus Price Target: $310.06 (21.3% implied return)
With over 600 million tests performed annually and involvement in 90% of FDA-approved drugs in 2023, Labcorp (NYSE: LH) provides laboratory testing services and drug development solutions to doctors, hospitals, pharmaceutical companies, and patients worldwide.
Why Do We Think Twice About LH?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.6% annually over the last five years
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Sales were less profitable over the last five years as its earnings per share fell by 11.1% annually, worse than its revenue declines
Labcorp’s stock price of $255.70 implies a valuation ratio of 14x forward P/E. Dive into our free research report to see why there are better opportunities than LH.
One Stock to Watch:
CRA (CRAI)
Consensus Price Target: $252.50 (55.8% implied return)
Often retained for high-stakes matters with multibillion-dollar implications, CRA International (NASDAQ: CRAI) provides economic, financial, and management consulting services to corporations, law firms, and government agencies for litigation, regulatory proceedings, and business strategy.
Why Do We Like CRAI?
- Annual revenue growth of 9.8% over the past two years was outstanding, reflecting market share gains this cycle
- Share repurchases over the last two years enabled its annual earnings per share growth of 22.6% to outpace its revenue gains
- Industry-leading 18.7% return on capital demonstrates management’s skill in finding high-return investments
At $162.08 per share, CRA trades at 18.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.
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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.
