2 of Wall Street’s favorite stocks for long-term investors and 1 that underwhelm
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 are two stocks likely to meet or exceed Wall Street’s lofty expectations and one where consensus estimates seem disconnected from reality.
One stock to sell:
America's Car-Mart (CRMT)
Consensus price target: $7.50 (1,003% implied return)
With a strong presence in the Southern and Central US, America’s Car-Mart (NASDAQ:CRMT) sells used cars to budget-conscious consumers.
Why Should You Sell CRMT?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Performance over the past three years was negatively impacted by new share issuances as its earnings per share dropped by 92.3% annually, worse than its revenue
- Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes
America's Car-Mart is trading at $0.68 per share, or 24.6x forward EV-to-EBITDA. To fully understand why you should be careful with CRMT, check out our full research report (it’s free).
Two stocks to buy:
Wabtec (WAB)
Consensus price target: $332.08 (19.6% implied return)
Also known as Wabtec, Westinghouse Air Brake Technologies (NYSE:WAB) provides equipment, systems, and related software for the railway industry.
Why Will WAB Outperform?
- Solid 9.5% annual revenue growth over the last five years indicates its offerings solve complex business issues
- Share buybacks catapulted its annual earnings per share growth to 18.6%, which outperformed its revenue gains over the last two years
- Free cash flow margin grew by 4.7 percentage points over the last five years, giving the company more chips to play with
Wabtec’s stock price of $277.77 implies a valuation ratio of 22.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
WisdomTree (WT)
Consensus price target: $26.14 (24.4% implied return)
Originally founded as a financial media company before pivoting to ETF management in 2006, WisdomTree (NYSE:WT) is a financial services company that creates and manages exchange-traded funds (ETFs) and other investment products for individual and institutional investors.
Why Is WT a Good Business?
- Annual revenue growth of 25.9% over the last two years was superb and indicates its market share increased during this cycle
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
At $21.01 per share, WisdomTree trades at 16.9x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
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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.