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.

Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. Keeping that in mind, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.

Cars.com (CARS)

Consensus Price Target: $16.21 (26% implied return)

Originally started as a joint venture between several media companies including The Washington Post and The New York Times, Cars.com (NYSE: CARS) is a digital marketplace that connects new and used car buyers and sellers.

Why Does CARS Fall Short?

1. Market opportunities are plateauing as its dealer customers were flat over the last two years
2. Estimated sales growth of 1.5% for the next 12 months implies demand will slow from its three-year trend
3. Earnings growth over the last three years fell short of the peer group average as its EPS only increased by 1.9% annually

At $12.87 per share, Cars.com trades at 3.8x forward EV/EBITDA. Check out our free in-depth research report to learn more about why CARS doesn’t pass our bar.

ACV Auctions (ACVA)

Consensus Price Target: $22.81 (60.5% implied return)

Founded in 2014, ACV Auctions (NASDAQ: ACVA) is an online auction marketplace for car dealers and wholesalers to buy and sell used cars.

Why Are We Hesitant About ACVA?

1. Bad unit economics and steep infrastructure costs are reflected in its low gross margin of 25.1%
2. Expensive marketing campaigns hurt its profitability and make us wonder what would happen if it let up on the gas
3. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 0.3% for the last two years

ACV Auctions is trading at $14.21 per share, or 26.6x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than ACVA.

U.S. Physical Therapy (USPH)

Consensus Price Target: $106 (44.9% implied return)

With a nationwide footprint spanning 671 clinics across 42 states, U.S. Physical Therapy (NYSE: USPH) operates a network of outpatient physical therapy clinics and provides industrial injury prevention services to employers across the United States.

Why Do We Think Twice About USPH?

1. Revenue base of $699.5 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
2. Performance over the past five years shows its incremental sales were less profitable as its earnings per share were flat
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 14.4 percentage points

U.S. Physical Therapy’s stock price of $73.15 implies a valuation ratio of 27.1x forward P/E. Read our free research report to see why you should think twice about including USPH in your portfolio.

High-Quality Stocks for All Market Conditions

Trump’s April 2024 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 Strong Momentum Stocks for this week. 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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