Wall Street is overwhelmingly bullish on the stocks in this article, with price targets suggesting significant upside potential. However, it’s worth remembering that analysts rarely issue sell ratings, partly because their firms often seek other business from the same companies they cover.
Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. That said, here are three stocks where Wall Street’s estimates seem disconnected from reality and some better opportunities to consider.
Offerpad (OPAD)
Consensus Price Target: $2.22 (64.8% implied return)
Known for giving homeowners cash offers within 24 hours, Offerpad (NYSE:OPAD) operates a tech-enabled platform specializing in direct home buying and selling solutions.
Why Do We Steer Clear of OPAD?
- Demand for its offerings was relatively low as its number of homes purchased has underwhelmed
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 10.6 percentage points over the next year
- Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes
At $1.35 per share, Offerpad trades at 0.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than OPAD.
Mayville Engineering (MEC)
Consensus Price Target: $24 (25.1% implied return)
Originally founded solely on tool and die manufacturing, Mayville Engineering Company (NYSE:MEC) specializes in metal fabrication, tube bending, and welding to be used in various industries.
Why Do We Think Twice About MEC?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 3.1% annually over the last two years
- High input costs result in an inferior gross margin of 12.8% that must be offset through higher volumes
- Earnings per share have dipped by 52.4% annually over the past two years, which is concerning because stock prices follow EPS over the long term
Mayville Engineering is trading at $19.19 per share, or 86.4x forward P/E. Check out our free in-depth research report to learn more about why MEC doesn’t pass our bar.
Franklin BSP Realty Trust (FBRT)
Consensus Price Target: $14.38 (38.1% implied return)
Operating as a specialized real estate investment trust (REIT) with roots dating back to 2012, Franklin BSP Realty Trust (NYSE:FBRT) originates and manages a diversified portfolio of commercial real estate debt investments secured by properties in the United States and abroad.
Why Do We Avoid FBRT?
- 9.4% annual net interest income growth over the last five years was slower than its banking peers
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 39.7% annually
- Tangible book value per share tumbled by 6.8% annually over the last five years, showing banking sector trends are working against its favor during this cycle
Franklin BSP Realty Trust’s stock price of $10.41 implies a valuation ratio of 0.7x forward P/B. If you’re considering FBRT for your portfolio, see our FREE research report to learn more.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.