3 of Wall Street’s Favorite Stocks Walking a Fine Line
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.
Latham (SWIM)
Consensus Price Target: $7.89 (22.5% implied return)
Started as a family business, Latham (NASDAQ:SWIM) is a global designer and manufacturer of in-ground residential swimming pools and related products.
Why Do We Think SWIM Will Underperform?
- 8.9% annual revenue growth over the last five years was slower than its consumer discretionary peers
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 1.1 percentage points over the next year
At $6.45 per share, Latham trades at 37x forward P/E. Read our free research report to see why you should think twice about including SWIM in your portfolio.
Matrix Service (MTRX)
Consensus Price Target: $16.50 (30.5% implied return)
Founded in Oklahoma, Matrix Service (NASDAQ:MTRX) provides engineering, fabrication, construction, and maintenance services primarily to the energy and industrial markets.
Why Are We Cautious About MTRX?
- Sales tumbled by 2.9% annually over the last five years, showing market trends are working against its favor during this cycle
- High input costs result in an inferior gross margin of 3.8% that must be offset through higher volumes
- Issuance of new shares over the last five years caused its earnings per share to fall by 66.3% annually, even worse than its revenue declines
Matrix Service is trading at $12.64 per share, or 22.7x forward P/E. To fully understand why you should be careful with MTRX, check out our full research report (it’s free for active Edge members).
BrightView (BV)
Consensus Price Target: $16.17 (24.5% implied return)
An official field consultant for Major League Baseball, BrightView (NYSE:BV) offers landscaping design, development, and maintenance.
Why Is BV Risky?
- Sales tumbled by 2.6% annually over the last two years, showing market trends are working against its favor during this cycle
- Earnings per share have contracted by 1.7% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- ROIC of 2.9% reflects management’s challenges in identifying attractive investment opportunities
BrightView’s stock price of $12.99 implies a valuation ratio of 16.7x forward P/E. If you’re considering BV for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).
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 Kadant (+351% 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.