1 of Wall Street’s Favorite Stock to Target This Week and 2 to Question

Wall Street has set ambitious price targets for the stocks in this article. While this suggests attractive upside potential, it’s important to remain skeptical because analysts face institutional pressures that can sometimes lead to overly optimistic forecasts.

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 where Wall Street’s positive outlook is supported by strong fundamentals and two where its enthusiasm might be excessive.

Two Stocks to Sell:

DigitalOcean (DOCN)

Consensus Price Target: $38 (27.5% implied return)

Started by brothers Ben and Moisey Uretsky, DigitalOcean (NYSE: DOCN) provides a simple, low-cost platform that allows developers and small and medium-sized businesses to host applications and data in the cloud.

Why Are We Hesitant About DOCN?

1. Customers have churned over the last year due to the commoditized nature of its software, as reflected in its 98.2% net revenue retention rate
2. Gross margin of 59.9% is way below its competitors, leaving less money to invest in areas like marketing and R&D

At $29.80 per share, DigitalOcean trades at 3.4x forward price-to-sales. Read our free research report to see why you should think twice about including DOCN in your portfolio.

Lindblad Expeditions (LIND)

Consensus Price Target: $15 (46.3% implied return)

Founded by explorer Sven-Olof Lindblad in 1979, Lindblad Expeditions (NASDAQ:LIND) offers cruising experiences to remote destinations in partnership with National Geographic.

Why Should You Dump LIND?

1. Muted 14.9% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
2. Earnings per share fell by 70.6% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Negative returns on capital show management lost money while trying to expand the business

Lindblad Expeditions’s stock price of $10.25 implies a valuation ratio of 5x forward EV-to-EBITDA. If you’re considering LIND for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

AMD (AMD)

Consensus Price Target: $126.98 (24.6% implied return)

Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices (NASDAQ:AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.

Why Are We Fans of AMD?

1. Annual revenue growth of 30.8% over the last five years was superb and indicates its market share increased during this cycle
2. Demand will likely accelerate over the next 12 months as its forecasted revenue growth of 16.2% is above its two-year trend
3. Earnings per share grew by 37.2% annually over the last five years, massively outpacing its peers

AMD is trading at $101.88 per share, or 22.2x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out 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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.