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. Keeping that in mind, here is one stock poised to prove Wall Street wrong and two where the skepticism is well-placed.
Two Stocks to Sell:
Credit Acceptance (CACC)
Consensus Price Target: $466.67 (-3.5% implied return)
Founded in 1972 by Donald Foss to serve customers overlooked by traditional lenders, Credit Acceptance (NASDAQ:CACC) provides auto financing solutions that enable car dealers to sell vehicles to consumers with limited or impaired credit histories.
Why Should You Dump CACC?
- Muted 2.8% annual revenue growth over the last five years shows its demand lagged behind its financials peers
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 2% annually while its revenue grew
- Debt-to-equity ratio of 4.1× shows the firm has taken on excessive debt, leaving little room for error
Credit Acceptance is trading at $483.76 per share, or 10.8x forward P/E. Check out our free in-depth research report to learn more about why CACC doesn’t pass our bar.
Lemonade (LMND)
Consensus Price Target: $67.11 (5.2% implied return)
Built on the principle of giving back unused premiums to charitable causes selected by policyholders, Lemonade (NYSE:LMND) is a technology-driven insurance company that offers homeowners, renters, pet, car, and life insurance through an AI-powered digital platform.
Why Are We Hesitant About LMND?
- Incremental sales over the last two years were less profitable as its 17.4% annual earnings per share growth lagged its revenue gains
- Products and services are facing significant credit quality challenges during this cycle as book value per share has declined by 7.2% annually over the last five years
- Negative return on equity shows management lost money while trying to expand the business
At $63.80 per share, Lemonade trades at 9.2x forward P/B. To fully understand why you should be careful with LMND, check out our full research report (it’s free).
One Stock to Buy:
EMCOR (EME)
Consensus Price Target: $772 (-3.9% implied return)
Through its network of over 70 subsidiaries, EMCOR (NYSE:EME) provides electrical, mechanical, and building construction and services
Why Are We Backing EME?
- Market share has increased this cycle as its 15.9% annual revenue growth over the last two years was exceptional
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Returns on capital are climbing as management makes more lucrative bets
EMCOR’s stock price of $803.56 implies a valuation ratio of 29x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.