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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. Keeping that in mind, here are three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.
Builders FirstSource (BLDR)
Consensus Price Target: $143.90 (29.1% implied return)
Headquartered in Irving, TX, Builders FirstSource (NYSE: BLDR) is a construction materials manufacturer that offers a variety of lumber and lumber-related building products.
Why Are We Wary of BLDR?
- Annual sales declines of 12.1% for the past two years show its products and services struggled to connect with the market during this cycle
- Earnings per share have dipped by 23.2% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Builders FirstSource’s stock price of $111.50 implies a valuation ratio of 11.4x forward P/E. Dive into our free research report to see why there are better opportunities than BLDR.
Regeneron (REGN)
Consensus Price Target: $800.13 (51.3% implied return)
Founded by scientists who wanted to build a company where science could thrive, Regeneron Pharmaceuticals (NASDAQ: REGN) develops and commercializes medicines for serious diseases, with key products treating eye conditions, allergic diseases, cancer, and other disorders.
Why Do We Think Twice About REGN?
- Sizable revenue base leads to growth challenges as its 6.7% annual revenue increases over the last two years fell short of other healthcare companies
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 12.3 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $529 per share, Regeneron trades at 13.2x forward P/E. Check out our free in-depth research report to learn more about why REGN doesn’t pass our bar.
Phreesia (PHR)
Consensus Price Target: $31.77 (24% implied return)
Founded in 2005 to streamline the traditionally paper-heavy patient check-in process, Phreesia (NYSE: PHR) provides software solutions that automate patient intake, registration, and payment processes for healthcare organizations while improving patient engagement in their care.
Why Does PHR Give Us Pause?
- Subscale operations are evident in its revenue base of $419.8 million, meaning it has fewer distribution channels than its larger rivals
- Cash-burning history makes us doubt the long-term viability of its business model
- Push for growth has led to negative returns on capital, signaling value destruction
Phreesia is trading at $25.62 per share, or 30.2x forward P/E. If you’re considering PHR for your portfolio, see our FREE research report to learn more.
Stocks We Like More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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.
