Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
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 where Wall Street’s pessimism is creating a buying opportunity and two where the outlook is warranted.
Two Stocks to Sell:
Unity (U)
Consensus Price Target: $26.08 (3.5% implied return)
Started as a game studio by three friends in a Copenhagen apartment, Unity (NYSE:U) is a software as a service platform that makes it easier to develop and monetize new games and other visual digital experiences.
Why Are We Wary of U?
- Offerings couldn’t generate interest over the last year as its billings have averaged 10.2% declines
- Platform has low switching costs as its net revenue retention rate of 96% demonstrates high turnover
- Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions
Unity’s stock price of $25.20 implies a valuation ratio of 5.7x forward price-to-sales. Dive into our free research report to see why there are better opportunities than U.
Papa John's (PZZA)
Consensus Price Target: $48.45 (-2.7% implied return)
Founded by the eclectic John “Papa John” Schnatter, Papa John’s (NASDAQ:PZZA) is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.
Why Do We Avoid PZZA?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Estimated sales growth of 2.9% for the next 12 months implies demand will slow from its six-year trend
- Gross margin of 17.3% reflects the bad unit economics inherent in most restaurant businesses
At $49.80 per share, Papa John's trades at 24.6x forward P/E. Read our free research report to see why you should think twice about including PZZA in your portfolio.
One Stock to Buy:
McKesson (MCK)
Consensus Price Target: $756.84 (6.2% implied return)
With roots dating back to 1833, making it one of America's oldest continuously operating businesses, McKesson (NYSE:MCK) is a healthcare services company that distributes pharmaceuticals, medical supplies, and provides technology solutions to pharmacies, hospitals, and healthcare providers.
Why Will MCK Beat the Market?
- Solid 13.9% annual revenue growth over the last two years indicates its offering’s solve complex business issues
- Enormous revenue base of $359.1 billion gives it economies of scale and advantages over new entrants due to the industry’s regulatory complexity
- Share buybacks catapulted its annual earnings per share growth to 17.2%, which outperformed its revenue gains over the last five years
McKesson is trading at $712.89 per share, or 19.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.