Wall Street is overwhelmingly bullish on the stocks in this article, with price targets suggesting significant upside potential. However, it’s worth remembering that analysts rarely issue sell ratings, partly because their firms often seek other business from the same companies they cover.
Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. That said, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.
Wiley (WLY)
Consensus Price Target: $60 (47.3% implied return)
With roots dating back to 1807 when Charles Wiley opened a small printing shop in Manhattan, John Wiley & Sons (NYSE: WLY) is a global academic publisher that provides scientific journals, books, digital courseware, and knowledge solutions for researchers, students, and professionals.
Why Should You Dump WLY?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.7% annually over the last five years
- Free cash flow margin shrank by 6.1 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Wiley is trading at $40.72 per share, or 1.3x trailing 12-month price-to-sales. If you’re considering WLY for your portfolio, see our FREE research report to learn more.
Genco (GNK)
Consensus Price Target: $19.79 (44.2% implied return)
Headquartered in NYC, Genco (NYSE: GNK) is a shipping company that transports dry bulk cargo along worldwide maritime routes.
Why Do We Avoid GNK?
- Sluggish trends in its owned vessels suggest customers aren’t adopting its solutions as quickly as the company hoped
- Earnings per share have contracted by 43.6% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6.5 percentage points
Genco’s stock price of $13.72 implies a valuation ratio of 20.9x forward P/E. Dive into our free research report to see why there are better opportunities than GNK.
SoundHound AI (SOUN)
Consensus Price Target: $11.81 (26.9% implied return)
Founded in 2005, SoundHound AI (NASDAQ: SOUN) develops independent voice artificial intelligence solutions that enable businesses across various industries to offer customized conversational experiences to consumers.
Why Does SOUN Worry Us?
- Bad unit economics and steep infrastructure costs are reflected in its gross margin of 44.1%, one of the worst among software companies
- Efficiency fell over the last year as its operating margin declined by 39 percentage points because it pursued growth instead of profits
- Cash-burning history makes us doubt the long-term viability of its business model
At $9.31 per share, SoundHound AI trades at 23.6x forward price-to-sales. To fully understand why you should be careful with SOUN, check out our full research report (it’s free).
Stocks We Like More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
