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. Keeping that in mind, here is one stock where Wall Street’s positive outlook is supported by strong fundamentals and two where its enthusiasm might be excessive.
Two Stocks to Sell:
Privia Health (PRVA)
Consensus Price Target: 2,600% (40.5% implied return)
Operating in 13 states and the District of Columbia with over 4,300 providers serving more than 4.8 million patients, Privia Health (NASDAQ: PRVA) is a technology-driven company that helps physicians optimize their practices, improve patient experiences, and transition to value-based care models.
Why Are We Wary of PRVA?
- Smaller revenue base of $1.74 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Negative returns on capital show management lost money while trying to expand the business
At $21.15 per share, Privia Health trades at 24.2x forward price-to-earnings. Read our free research report to see why you should think twice about including PRVA in your portfolio.
AdaptHealth (AHCO)
Consensus Price Target: 1,128% (46.9% implied return)
With a network of approximately 680 locations serving patients across all 50 states, AdaptHealth (NASDAQ: AHCO) provides home medical equipment, supplies, and related services to patients with chronic conditions like sleep apnea, diabetes, and respiratory disorders.
Why Are We Cautious About AHCO?
- 4.8% annual revenue growth over the last two years was slower than its healthcare peers
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its shrinking returns suggest its past profit sources are losing steam
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
AdaptHealth is trading at $8.85 per share, or 8.8x forward price-to-earnings. Check out our free in-depth research report to learn more about why AHCO doesn’t pass our bar.
One Stock to Watch:
MACOM (MTSI)
Consensus Price Target: 14,746% (69.7% implied return)
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
Why Are We Positive On MTSI?
- 6.6% annual revenue growth over the last two years surpassed the sector average as its products resonated with customers
- Market share is on track to rise over the next 12 months as its 21.1% projected revenue growth implies demand will accelerate from its two-year trend
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 49.2% annually
MACOM’s stock price of $87.31 implies a valuation ratio of 24.1x forward price-to-earnings. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
