When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as M&A advisory.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. That said, here are two stocks where Wall Street’s pessimism is creating a buying opportunity and one facing legitimate challenges.
One Stock to Sell:
Monarch (MCRI)
Consensus Price Target: $88 (6.6% implied return)
Established in 1993, Monarch (NASDAQ: MCRI) operates luxury casinos and resorts, offering high-end gaming, dining, and hospitality experiences.
Why Does MCRI Fall Short?
- 4% annual revenue growth over the last two years was slower than its consumer discretionary peers
- Estimated sales growth of 2% for the next 12 months implies demand will slow from its two-year trend
- ROIC of 14.4% reflects management’s challenges in identifying attractive investment opportunities
At $82.52 per share, Monarch trades at 8.5x forward EV-to-EBITDA. If you’re considering MCRI for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Lyft (LYFT)
Consensus Price Target: $17.06 (3.8% implied return)
Founded by Logan Green and John Zimmer as a long-distance intercity carpooling company Zimride, Lyft (NASDAQ: LYFT) operates a ridesharing network in the US and Canada.
Why Do We Like LYFT?
- Active Riders have increased by an average of 10.1% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 72.9% over the last three years outstripped its revenue performance
- Free cash flow margin expanded by 23.3 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends
Lyft is trading at $16.43 per share, or 13.6x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Ulta (ULTA)
Consensus Price Target: $415.85 (0.4% implied return)
Offering high-end prestige brands as well as lower-priced, mass-market ones, Ulta Beauty (NASDAQ: ULTA) is an American retailer that sells makeup, skincare, haircare, and fragrance products.
Why Could ULTA Be a Winner?
- Store expansion strategy is justified by its healthy same-store sales
- Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 3.4% over the past two years
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its rising returns show it’s making even more lucrative bets
Ulta’s stock price of $414 implies a valuation ratio of 17.7x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
