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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. That said, 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:
Revolve (RVLV)
Consensus Price Target: $30.62 (35.9% implied return)
Launched in 2003 by software engineers Michael Mente and Mike Karanikolas, Revolve (NYSE:RVLV) is a fashion retailer leveraging social media and a community of fashion influencers to drive its merchandising strategy.
Why Are We Hesitant About RVLV?
- Lackluster 6.6% annual revenue growth over the last three years indicates the company is losing ground to competitors
- May need to improve its platform and marketing strategy as its 6.5% average growth in active customers underwhelmed
- Excessive marketing spend signals little organic demand and traction for its platform
Revolve’s stock price of $22.52 implies a valuation ratio of 12.9x forward EV/EBITDA. Read our free research report to see why you should think twice about including RVLV in your portfolio.
DaVita (DVA)
Consensus Price Target: $219.86 (20.6% implied return)
With over 2,600 dialysis centers across the United States and a presence in 13 countries, DaVita (NYSE:DVA) operates a network of dialysis centers providing treatment and care for patients with chronic kidney disease and end-stage kidney disease.
Why Does DVA Give Us Pause?
- Flat treatments over the past two years indicate demand is soft and that the company may need to revise its strategy
- Estimated sales growth of 2% for the next 12 months implies demand will slow from its two-year trend
- Adjusted operating margin failed to increase over the last two years, indicating the company couldn’t optimize its expenses
At $182.31 per share, DaVita trades at 11.9x forward P/E. If you’re considering DVA for your portfolio, see our FREE research report to learn more.
One stock to watch:
Caterpillar (CAT)
Consensus Price Target: $945.76 (37.9% implied return)
With its iconic yellow machinery working on construction sites, Caterpillar (NYSE:CAT) manufactures construction equipment like bulldozers, excavators, and parts and maintenance services.
Why Should CAT Be on Your Watchlist?
- Solid 10.2% annual revenue growth over the last five years indicates its offerings solve complex business issues
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 21.7% exceeded its revenue gains over the last five years
- Free cash flow margin grew by 6.9 percentage points over the last five years, giving the company more chips to play with
Caterpillar is trading at $685.98 per share, or 24.3x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.