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 are two stocks where Wall Street’s positive outlook is supported by strong fundamentals and one where analysts may be overlooking some important risks.
One Stock to Sell:
Driven Brands (DRVN)
Consensus Price Target: $19.14 (46.7% implied return)
With approximately 5,000 locations across 49 U.S. states and 13 other countries, Driven Brands (NASDAQ: DRVN) operates a network of automotive service centers offering maintenance, car washes, paint, collision repair, and glass services across North America.
Why Are We Wary of DRVN?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and in-store experience
- Cash-burning history makes us doubt the long-term viability of its business model
- Negative returns on capital show management lost money while trying to expand the business, and its decreasing returns suggest its historical profit centers are aging
Driven Brands is trading at $13.05 per share, or 10.2x forward P/E. Read our free research report to see why you should think twice about including DRVN in your portfolio.
Two Stocks to Watch:
Shopify (SHOP)
Consensus Price Target: $159.70 (21.5% implied return)
Starting with just three people selling snowboards online in 2004, Shopify (NASDAQ: SHOP) provides a comprehensive platform that enables merchants of all sizes to create, manage and grow their businesses across multiple sales channels.
Why Should You Buy SHOP?
- Billings growth has averaged 30.7% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
Shopify’s stock price of $131.43 implies a valuation ratio of 11.2x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
KBR (KBR)
Consensus Price Target: $51.13 (39% implied return)
Known for projects like the construction of Guantanamo Bay, KBR provides professional services and technologies, specializing in engineering, construction, and government services sectors.
Why Do We Like KBR?
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Improving returns on capital reflect management’s ability to monetize investments
At $36.79 per share, KBR trades at 9.2x forward P/E. Is now a good time to buy? Find out 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
