2 of Wall Street’s Favorite Stocks Worth Your Attention and 1 Facing Headwinds
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.
Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. Keeping that in mind, here are two stocks likely to meet or exceed Wall Street’s lofty expectations and one where analysts may be overlooking some important risks.
One Stock to Sell:
PAR Technology (PAR)
Consensus Price Target: $25.31 (71.1% implied return)
Originally founded in 1968 as a defense contractor for the U.S. government, PAR Technology (NYSE:PAR) provides cloud-based software, payment processing, and hardware solutions that help restaurants manage everything from point-of-sale to customer loyalty programs.
Why Does PAR Worry Us?
- Cash-burning history makes us doubt the long-term viability of its business model
- Negative returns on capital show that some of its growth strategies have backfired
At $14.80 per share, PAR Technology trades at 13.2x forward P/E. Read our free research report to see why you should think twice about including PAR in your portfolio.
Two Stocks to Watch:
Novanta (NOVT)
Consensus Price Target: $194.50 (34.6% implied return)
Originally a pioneer in the laser scanning industry during the late 1960s, Novanta (NASDAQ:NOVT) offers medicine and manufacturing technology to the medical, life sciences, and manufacturing industries.
Why Should NOVT Be on Your Watchlist?
- Annual revenue growth of 10.7% over the past five years was outstanding, reflecting market share gains this cycle
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 20.5%
- Offerings are difficult to replicate at scale and lead to a premier gross margin of 44.4%
Novanta’s stock price of $144.53 implies a valuation ratio of 37.4x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Zurn Elkay (ZWS)
Consensus Price Target: $58 (24.5% implied return)
Claiming to have saved more than 30 billion gallons of water, Zurn Elkay (NYSE:ZWS) provides water management solutions to various industries.
Why Are We Positive on ZWS?
- Annual revenue growth of 9.6% over the last five years beat the sector average and underscores the unique value of its offerings
- Operating margin expanded by 6.3 percentage points over the last five years as it scaled and became more efficient
- Strong free cash flow margin of 15.8% enables it to reinvest or return capital consistently, and its recently improved profitability means it has even more resources to invest or distribute
Zurn Elkay is trading at $46.60 per share, or 24.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.