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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. That said, here is one stock where Wall Street’s excitement appears well-founded and two where analysts may be overlooking some important risks.
Two Stocks to Sell:
PubMatic (PUBM)
Consensus Price Target: $21 (20% implied return)
Powering billions of daily ad impressions across the open internet, PubMatic (NASDAQ: PUBM) operates a technology platform that helps publishers maximize revenue from their digital advertising inventory while giving advertisers more control and transparency.
Why Is PUBM Risky?
- Customers have churned over the last year due to the commoditized nature of its software, as reflected in its 96% net revenue retention rate
- Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 18.1 percentage points over the next year
PubMatic’s stock price of $17.50 implies a valuation ratio of 2.5x forward price-to-sales. If you’re considering PUBM for your portfolio, see our FREE research report to learn more.
Krispy Kreme (DNUT)
Consensus Price Target: $4.08 (36.9% implied return)
Famous for its Original Glazed doughnuts and parent company of Insomnia Cookies, Krispy Kreme (NASDAQ: DNUT) is one of the most beloved and well-known fast-food chains in the world.
Why Do We Avoid DNUT?
- Muted 6.2% annual revenue growth over the last seven years shows its demand lagged behind its restaurant peers
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- 8× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
At $2.98 per share, Krispy Kreme trades at 42.3x forward P/E. To fully understand why you should be careful with DNUT, check out our full research report (it’s free).
One Stock to Watch:
Mueller Water Products (MWA)
Consensus Price Target: $27 (24% implied return)
As one of the oldest companies in the water infrastructure industry, Mueller (NYSE: MWA) is a provider of water infrastructure products and flow control systems for various sectors.
Why Could MWA Be a Winner?
- Operating margin improvement of 8.9 percentage points over the last five years demonstrates its ability to scale efficiently
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 29.2% over the last two years outstripped its revenue performance
- Free cash flow margin increased by 12.1 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Mueller Water Products is trading at $21.77 per share, or 14.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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 Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
