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. Keeping that in mind, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.
Ameresco (AMRC)
Consensus Price Target: $42.90 (53.2% implied return)
Having played a role in upgrading the energy solutions of Alcatraz Island, Ameresco (NYSE: AMRC) provides energy and renewable energy solutions for various sectors.
Why Are We Cautious About AMRC?
- Earnings per share fell by 12% annually over the last five years while its revenue grew, partly because it diluted shareholders
- Negative free cash flow raises questions about the return timeline for its investments
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Ameresco’s stock price of $28 implies a valuation ratio of 25.3x forward P/E. Check out our free in-depth research report to learn more about why AMRC doesn’t pass our bar.
Danaher (DHR)
Consensus Price Target: $242.35 (34.4% implied return)
Born from a real estate investment trust that transformed into a manufacturing powerhouse, Danaher (NYSE: DHR) is a global science and technology company that provides specialized equipment, software, and services for biotechnology, life sciences, and diagnostics.
Why Does DHR Worry Us?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 10.6 percentage points
- Flat earnings per share over the last five years lagged its peers
At $180.33 per share, Danaher trades at 20.8x forward P/E. Dive into our free research report to see why there are better opportunities than DHR.
Alight (ALIT)
Consensus Price Target: $2.20 (188% implied return)
Born from a corporate spinoff in 2017 to focus on employee experience technology, Alight (NYSE: ALIT) provides human capital management solutions that help companies administer employee benefits, payroll, and workforce management systems.
Why Do We Avoid ALIT?
- Sales tumbled by 3.8% annually over the last five years, showing market trends are working against it during this cycle
- Earnings per share have dipped by 19.5% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Alight is trading at $0.77 per share, or 2.6x forward P/E. Read our free research report to see why you should think twice about including ALIT in your portfolio.
High-Quality Stocks for All Market Conditions
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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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
