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. Keeping that in mind, 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:
nLIGHT (LASR)
Consensus Price Target: $41.50 (14.1% implied return)
Founded by a former CEO and Harvard-educated entrepreneur Scott Keeneyn, nLIGHT (NASDAQ: LASR) offers semiconductor and fiber lasers to the industrial, aerospace & defense, and medical sectors.
Why Is LASR Risky?
- Sales trends were unexciting over the last five years as its 2.6% annual growth was below the typical industrials company
- Free cash flow margin dropped by 7.9 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
nLIGHT is trading at $36.37 per share, or 128.7x forward P/E. If you’re considering LASR for your portfolio, see our FREE research report to learn more.
Mister Car Wash (MCW)
Consensus Price Target: $7.48 (43% implied return)
Formerly known as Hotshine Holdings, Mister Car Wash (NYSE: MCW) offers car washes across the United States through its conveyorized service.
Why Do We Steer Clear of MCW?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its stores
- Improving returns on capital suggest management is identifying more profitable investments
- 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $5.24 per share, Mister Car Wash trades at 11.4x forward P/E. To fully understand why you should be careful with MCW, check out our full research report (it’s free for active Edge members).
One Stock to Watch:
Toast (TOST)
Consensus Price Target: $47.42 (34.8% implied return)
Born from the frustrations of three friends waiting too long for their restaurant bill, Toast (NYSE: TOST) provides a cloud-based digital technology platform with software, payment processing, and hardware solutions built specifically for restaurants.
Why Do We Like TOST?
- Ability to secure long-term commitments with customers is evident in its 31.3% ARR growth over the last year
- Forecasted revenue growth of 21.1% for the next 12 months indicates its momentum over the last two years is sustainable
Toast’s stock price of $35.18 implies a valuation ratio of 3x forward price-to-sales. 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
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% 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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