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.
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 are three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.
Udemy (UDMY)
Consensus Price Target: $7.25 (52.8% implied return)
With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ: UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.
Why Are We Hesitant About UDMY?
- Monthly Active Buyers have declined by 56.2% annually over the last two years, suggesting it may need to revamp its features or user experience to stay competitive
- Estimated sales growth of 2% for the next 12 months implies demand will slow from its three-year trend
- Excessive marketing spend signals little organic demand and traction for its platform
Udemy is trading at $4.75 per share, or 3.3x forward EV/EBITDA. Read our free research report to see why you should think twice about including UDMY in your portfolio.
Steven Madden (SHOO)
Consensus Price Target: $47 (19.9% implied return)
As seen in the infamous Wolf of Wall Street movie, Steven Madden (NASDAQ: SHOO) is a fashion brand famous for its trendy and innovative footwear, appealing to a young and style-conscious audience.
Why Should You Dump SHOO?
- Annual revenue growth of 13.2% over the last five years was below our standards for the consumer discretionary sector
- Low free cash flow margin of 7.8% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Steven Madden’s stock price of $39.20 implies a valuation ratio of 19.7x forward P/E. Dive into our free research report to see why there are better opportunities than SHOO.
European Wax Center (EWCZ)
Consensus Price Target: $7.13 (24.7% implied return)
Founded by two siblings, European Wax Center (NASDAQ: EWCZ) is a beauty and waxing salon chain specializing in professional wax services and skincare products.
Why Do We Steer Clear of EWCZ?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Earnings growth underperformed the sector average over the last four years as its EPS grew by just 4% annually
- Underwhelming 11.8% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $5.72 per share, European Wax Center trades at 10.7x forward P/E. Check out our free in-depth research report to learn more about why EWCZ doesn’t pass our bar.
Stocks We Like 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
