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.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. That said, here is one stock poised to prove Wall Street wrong and two facing legitimate challenges.
Two Stocks to Sell:
Plug Power (PLUG)
Consensus Price Target: $1.97 (-10.1% implied return)
Powering forklifts for Walmart’s distribution centers, Plug Power (NASDAQ: PLUG) provides hydrogen fuel cells used to power electric motors.
Why Is PLUG Risky?
- Annual sales declines of 12.6% for the past two years show its products and services struggled to connect with the market during this cycle
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6,283 percentage points
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Plug Power is trading at $2.19 per share, or 3.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than PLUG.
BankUnited (BKU)
Consensus Price Target: $42.48 (9% implied return)
Born from the ashes of a failed Florida thrift during the 2009 financial crisis, BankUnited (NYSE: BKU) is a regional bank that provides commercial lending, deposit services, and treasury solutions to businesses and consumers primarily in Florida and the New York metropolitan area.
Why Do We Pass on BKU?
- Muted 5.3% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
- Inferior net interest margin of 2.7% means it must compensate for lower profitability through increased loan originations
- Anticipated 25.8 percentage point rise in its efficiency ratio suggests its expenses will increase as a percentage of revenue
BankUnited’s stock price of $38.98 implies a valuation ratio of 1x forward P/B. If you’re considering BKU for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Federated Hermes (FHI)
Consensus Price Target: $50.86 (-3.5% implied return)
With roots dating back to 1955 and a pioneering role in money market funds, Federated Hermes (NYSE: FHI) is an investment management firm that offers a wide range of funds and strategies for institutional and individual investors.
Why Could FHI Be a Winner?
- Performance over the past two years was boosted by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Industry-leading 24.7% return on equity demonstrates management’s skill in finding high-return investments
At $52.70 per share, Federated Hermes trades at 11.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
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 Tecnoglass (+1,754% 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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