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 is one stock likely to meet or exceed Wall Street’s lofty expectations and two where analysts may be overlooking some important risks.
Two Stocks to Sell:
Delta (DAL)
Consensus Price Target: $81.89 (9.5% implied return)
One of the ‘Big Four’ airlines in the US, Delta Air Lines (NYSE:DAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.
Why Do We Think DAL Will Underperform?
- Performance surrounding its revenue passenger miles has lagged its peers
- Projected 1.2 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Delta is trading at $74.78 per share, or 10.5x forward P/E. Dive into our free research report to see why there are better opportunities than DAL.
Alight (ALIT)
Consensus Price Target: $4.58 (194% implied return)
Born from a corporate spinoff in 2017 to focus on employee experience technology, Alight (NYSE:ALIT) provides human capital management solutions that help companies administer employee benefits, payroll, and workforce management systems.
Why Should You Dump ALIT?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 3.1% annually over the last five years
- Earnings per share have contracted by 5% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $1.56 per share, Alight trades at 2.7x forward P/E. Read our free research report to see why you should think twice about including ALIT in your portfolio.
One Stock to Buy:
Reddit (RDDT)
Consensus Price Target: $233.76 (64.6% implied return)
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE:RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Why Are We Backing RDDT?
- Domestic Daily Active Visitors have grown by 29.2% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Switching costs of its platform were on full display over the last two years as it not only grew engagement but also increased the average revenue per user by 22.1% annually
- Robust free cash flow margin of 25.7% gives it many options for capital deployment, and its improved cash conversion implies it’s becoming a less capital-intensive business
Reddit’s stock price of $142.04 implies a valuation ratio of 19.6x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.