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.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. That said, here is one stock poised to prove Wall Street wrong and two where the outlook is warranted.
Two Stocks to Sell:
Domino's (DPZ)
Consensus Price Target: $509.26 (5.1% implied return)
Founded by two brothers in Michigan, Domino’s (NYSE: DPZ) is a globally recognized pizza chain known for its creative marketing and fast delivery.
Why Are We Wary of DPZ?
- Annual revenue growth of 5.2% over the last six years was below our standards for the restaurant sector
- Estimated sales growth of 5.8% for the next 12 months is soft and implies weaker demand
- Operating margin didn’t move over the last year, showing it couldn’t increase its efficiency
Domino's is trading at $484.35 per share, or 27.2x forward P/E. To fully understand why you should be careful with DPZ, check out our full research report (it’s free).
Boeing (BA)
Consensus Price Target: $210.53 (4.7% implied return)
One of the companies that forms a duopoly in the commercial aircraft market, Boeing (NYSE: BA) develops, manufactures, and services commercial airplanes, defense products, and space systems.
Why Is BA Risky?
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Boeing’s stock price of $201.04 implies a valuation ratio of 28.5x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including BA in your portfolio.
One Stock to Buy:
AZEK (AZEK)
Consensus Price Target: $53.91 (10% implied return)
With a significant portion of its products made from recycled materials, AZEK (NYSE: AZEK) designs and manufactures goods for outdoor living spaces.
Why Are We Backing AZEK?
- Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 12.5% over the past two years
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Free cash flow margin grew by 8.8 percentage points over the last five years, giving the company more chips to play with
At $49.01 per share, AZEK trades at 32.1x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even 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 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
