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. That said, here is one stock likely to meet or exceed Wall Street’s lofty expectations and two where its enthusiasm might be excessive.
Two Stocks to Sell:
General Motors (GM)
Consensus Price Target: $94.08 (23.8% implied return)
Founded in 1908 by William C. Durant, General Motors (NYSE: GM) offers a range of vehicles and automobiles through brands such as Chevrolet, Buick, GMC, and Cadillac.
Why Are We Hesitant About GM?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 2.8% over the last two years was below our standards for the industrials sector
- High input costs result in an inferior gross margin of 12.1% that must be offset through higher volumes
- Efficiency has decreased over the last five years as its operating margin fell by 5 percentage points
General Motors’s stock price of $75.98 implies a valuation ratio of 6x forward P/E. Read our free research report to see why you should think twice about including GM in your portfolio.
Hercules Capital (HTGC)
Consensus Price Target: $19.31 (21.2% implied return)
Named after the mythological hero known for his strength, Hercules Capital (NYSE: HTGC) is a business development company that provides debt financing to venture capital-backed and growth-stage technology and life sciences companies.
Why Does HTGC Give Us Pause?
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 3.9% annually while its revenue grew
- 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Hercules Capital is trading at $15.92 per share, or 8.2x forward P/E. Check out our free in-depth research report to learn more about why HTGC doesn’t pass our bar.
One Stock to Watch:
Kratos (KTOS)
Consensus Price Target: $111.95 (113% implied return)
Established with a commitment to supporting national security, Kratos (NASDAQ: KTOS) is a provider of advanced engineering, technology, and security solutions tailored for critical national security applications.
Why Is KTOS on Our Radar?
- Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 14.6% over the past two years
- Market share is on track to rise over the next 12 months as its 30.6% projected revenue growth implies demand will accelerate from its two-year trend
- Earnings per share grew by 15.8% annually over the last two years, massively outpacing its peers
At $52.58 per share, Kratos trades at 71.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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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.
