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 is one stock where Wall Street’s positive outlook is supported by strong fundamentals and two where analysts may be overlooking some important risks.
Two Stocks to Sell:
Udemy (UDMY)
Consensus Price Target: $9.67 (71.2% implied return)
With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ:UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.
Why Are We Cautious About UDMY?
- Preference for prioritizing user growth over monetization has led to 1.7% annual drops in its average revenue per buyer
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- Excessive marketing spend signals little organic demand and traction for its platform
Udemy’s stock price of $5.65 implies a valuation ratio of 9x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than UDMY.
Choice Hotels (CHH)
Consensus Price Target: $108.13 (21.4% implied return)
With almost 100% of its properties under franchise agreements, Choice Hotels (NYSE:CHH) is a hotel franchisor known for its diverse brand portfolio including Comfort Inn, Quality Inn, and Clarion.
Why Should You Dump CHH?
- Revenue per room has disappointed over the past two years due to weaker trends in its daily rates and occupancy levels
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $89.08 per share, Choice Hotels trades at 12.3x forward P/E. Check out our free in-depth research report to learn more about why CHH doesn’t pass our bar.
One Stock to Watch:
AZZ (AZZ)
Consensus Price Target: $125.56 (14.4% implied return)
Responsible for projects like nuclear facilities, AZZ (NYSE:AZZ) is a provider of metal coating and power infrastructure solutions.
Why Are We Positive On AZZ?
- Excellent operating margin of 15% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 26% over the last two years outstripped its revenue performance
- Free cash flow margin jumped by 23 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
AZZ is trading at $109.75 per share, or 17.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 6 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 Tecnoglass (+1,754% 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
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