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.
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 likely to meet or exceed Wall Street’s lofty expectations and two where its enthusiasm might be excessive.
Two Stocks to Sell:
RingCentral (RNG)
Consensus Price Target: $41.95 (59.7% implied return)
Founded in 1999 during the dot-com era, RingCentral (NYSE: RNG) provides software as a service that unifies phone, text, fax, video calls and chat in one platform.
Why Does RNG Worry Us?
- Average ARR growth of 8.9% over the last year has disappointed, suggesting it’s had a hard time winning long-term deals and renewals
- Competitive market dynamics make it difficult to retain customers, leading to a weak 99.1% net revenue retention rate
- Estimated sales growth of 4.7% for the next 12 months implies demand will slow from its three-year trend
At $22.41 per share, RingCentral trades at 0.8x forward price-to-sales. If you’re considering RNG for your portfolio, see our FREE research report to learn more.
SolarEdge (SEDG)
Consensus Price Target: $15.18 (28.5% implied return)
Established in 2006, SolarEdge (NASDAQ: SEDG) creates advanced systems to improve the efficiency of solar panels.
Why Should You Sell SEDG?
- Demand for its offerings was relatively low as its number of megawatts shipped has underwhelmed
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
SolarEdge is trading at $12.60 per share, or 0.7x forward price-to-sales. Check out our free in-depth research report to learn more about why SEDG doesn’t pass our bar.
One Stock to Watch:
Ingersoll Rand (IR)
Consensus Price Target: $104.32 (26.1% implied return)
Started with the invention of the steam drill, Ingersoll Rand (NYSE: IR) provides mission-critical air, gas, liquid, and solid flow creation solutions.
Why Do We Like IR?
- Impressive 10.6% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Additional sales over the last two years increased its profitability as the 18% annual growth in its earnings per share outpaced its revenue
- IR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
Ingersoll Rand’s stock price of $74 implies a valuation ratio of 20.3x forward price-to-earnings. Is now the time to initiate a position? Find out in our full 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 6 Stocks for this week. 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 Axon (+711% five-year return). Find your next big winner with StockStory today for free.
