Wall Street has set ambitious price targets for the stocks in this article. While this suggests attractive upside potential, it’s important to remain skeptical because analysts face institutional pressures that can sometimes lead to overly optimistic forecasts.
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 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:
PayPal (PYPL)
Consensus Price Target: $51.35 (24.3% implied return)
Originally spun off from eBay in 2015 after being acquired by the auction giant in 2002, PayPal (NASDAQ: PYPL) operates a global digital payments platform that enables consumers and merchants to send, receive, and process payments online and in person.
Why Is PYPL Not Exciting?
- Annual sales growth of 5.3% over the last two years lagged behind its financials peers as its large revenue base made it difficult to generate incremental demand
- Annual earnings per share growth of 2.8% underperformed its revenue over the last two years, showing its incremental sales were less profitable
PayPal’s stock price of $41.30 implies a valuation ratio of 7.9x forward P/E. If you’re considering PYPL for your portfolio, see our FREE research report to learn more.
Cognex (CGNX)
Consensus Price Target: $76.25 (25.9% implied return)
Founded in 1981 when computer vision was in its infancy, Cognex (NASDAQ: CGNX) develops machine vision systems and software that help manufacturers and logistics companies automate quality inspection and tracking of products.
Why Does CGNX Worry Us?
- Annual revenue growth of 3.5% over the last five years was below our standards for the business services sector
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 2.2% annually
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $60.55 per share, Cognex trades at 42.5x forward P/E. To fully understand why you should be careful with CGNX, check out our full research report (it’s free).
One Stock to Watch:
Intuitive Surgical (ISRG)
Consensus Price Target: $565.25 (34.7% implied return)
Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ: ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties.
Why Is ISRG Interesting?
- Market share has increased this cycle as its 20.2% annual revenue growth over the last two years was exceptional
- Share repurchases over the last five years enabled its annual earnings per share growth of 21.3% to outpace its revenue gains
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
Intuitive Surgical is trading at $419.62 per share, or 39.3x forward P/E. Is now the right time to buy? See for yourself 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 (+1,326% 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.
