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.
Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. Keeping that in mind, here are three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.
Taylor Morrison Home (TMHC)
Consensus Price Target: $73 (24.1% implied return)
Named “America’s Most Trusted Home Builder” in 2019, Taylor Morrison Home (NYSE: TMHC) builds single family homes and communities across the United States.
Why Are We Cautious About TMHC?
- Backlog has dropped by 14.5% on average over the past two years, suggesting it’s losing orders as competition picks up
- Forecasted revenue decline of 13.6% for the upcoming 12 months implies demand will fall off a cliff
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 2.6% annually
At $58.83 per share, Taylor Morrison Home trades at 9.2x forward P/E. To fully understand why you should be careful with TMHC, check out our full research report (it’s free for active Edge members).
ScanSource (SCSC)
Consensus Price Target: $53 (35.7% implied return)
Operating as a crucial link in the technology supply chain since 1992, ScanSource (NASDAQ: SCSC) is a hybrid distributor that connects hardware, software, and cloud services from technology suppliers to resellers and business customers.
Why Is SCSC Risky?
- Annual sales declines of 11.1% for the past two years show its products and services struggled to connect with the market during this cycle
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 3.8% annually
- Low free cash flow margin of 2.6% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
ScanSource is trading at $39.07 per share, or 9.1x forward P/E. Read our free research report to see why you should think twice about including SCSC in your portfolio.
Ocular Therapeutix (OCUL)
Consensus Price Target: $24.17 (106% implied return)
Pioneering a drug delivery platform that can eliminate the need for monthly eye injections, Ocular Therapeutix (NASDAQ: OCUL) develops sustained-release treatments for eye diseases using its proprietary ELUTYX bioresorbable hydrogel technology that gradually releases medication.
Why Are We Out on OCUL?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.7% annually over the last two years
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 206.8 percentage points
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Ocular Therapeutix’s stock price of $11.75 implies a valuation ratio of 37.7x forward price-to-sales. If you’re considering OCUL for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
