Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. That said, here is one stock poised to prove Wall Street wrong and two where the skepticism is well-placed.
Two Stocks to Sell:
Palo Alto Networks (PANW)
Consensus Price Target: $212.23 (3.7% implied return)
Founded in 2005 by cybersecurity engineer Nir Zuk, Palo Alto Networks (NASDAQ:PANW) makes hardware and software cybersecurity products that protect companies from cyberattacks, breaches, and malware threats.
Why Does PANW Fall Short?
- Revenue increased by 19.7% annually over the last three years, acceptable on an absolute basis but tepid for a software company enjoying secular tailwinds
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 3% underwhelmed
Palo Alto Networks’s stock price of $204.60 implies a valuation ratio of 14.3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than PANW.
Herbalife (HLF)
Consensus Price Target: $8.67 (-12.8% implied return)
With the first products sold out of the trunk of the founder’s car, Herbalife (NYSE:HLF) today offers a portfolio of shakes, supplements, personal care products, and weight management programs to help customers reach their nutritional and fitness goals.
Why Are We Wary of HLF?
- Shrinking unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 1.6%
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
At $9.94 per share, Herbalife trades at 4.8x forward P/E. To fully understand why you should be careful with HLF, check out our full research report (it’s free).
One Stock to Watch:
First Financial Bankshares (FFIN)
Consensus Price Target: $39 (7.2% implied return)
With roots dating back to 1890 and a network spanning over 70 locations across the Lone Star State, First Financial Bankshares (NASDAQ:FFIN) is a Texas-focused regional bank providing commercial banking, trust services, and wealth management across numerous communities throughout the state.
Why Do We Watch FFIN?
- Solid 7.3% annual revenue growth over the last two years indicates its offering’s solve complex business issues
- Net interest margin jumped by 34.7 basis points (100 basis points = 1 percentage point) over the last two years, giving the company more resources to pursue growth initiatives
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 5.3% annually
First Financial Bankshares is trading at $36.38 per share, or 2.9x forward P/B. 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
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
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