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.
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 is one stock where Wall Street’s excitement appears well-founded and two where analysts may be overlooking some important risks.
Two Stocks to Sell:
Lucky Strike (LUCK)
Consensus Price Target: $13.55 (57.4% implied return)
Born from the transformation of traditional bowling alleys into modern entertainment destinations, Lucky Strike (NYSE: LUCK) operates bowling alleys and other entertainment venues with upscale amenities, arcade games, and food and beverage services across North America.
Why Do We Think LUCK Will Underperform?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Diminishing returns on capital suggest its earlier profit pools are drying up
- 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
Lucky Strike is trading at $8.61 per share, or 80.6x forward P/E. Check out our free in-depth research report to learn more about why LUCK doesn’t pass our bar.
EPAM (EPAM)
Consensus Price Target: $202.06 (28.9% implied return)
Founded in 1993 during the early days of offshore software development, EPAM Systems (NYSE: EPAM) provides digital engineering, cloud, and AI transformation services to help global enterprises and startups modernize their technology systems and create digital products.
Why Are We Wary of EPAM?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Performance over the past two years shows its incremental sales were less profitable as its earnings per share were flat
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
EPAM’s stock price of $156.80 implies a valuation ratio of 13.5x forward P/E. To fully understand why you should be careful with EPAM, check out our full research report (it’s free for active Edge members).
One Stock to Watch:
Ollie's (OLLI)
Consensus Price Target: $147.20 (21.5% implied return)
Often located in suburban or semi-rural shopping centers, Ollie’s Bargain Outlet (NASDAQ: OLLI) is a discount retailer that acquires excess inventory then sells at meaningful discounts.
Why Is OLLI on Our Radar?
- Fast expansion of new stores to reach markets with few or no locations is justified by its same-store sales growth
- Comparable store sales rose by 3.7% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
- Projected revenue growth of 15.6% for the next 12 months is above its six-year trend, pointing to accelerating demand
At $121.18 per share, Ollie's trades at 29.3x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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