Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. That said, here are two stocks where Wall Street’s pessimism is creating a buying opportunity and one where the skepticism is well-placed.
One Stock to Sell:
Align Technology (ALGN)
Consensus Price Target: $183.87 (9.8% implied return)
Pioneering an alternative to traditional metal braces with nearly invisible plastic aligners, Align Technology (NASDAQ: ALGN) designs and manufactures Invisalign clear aligners, iTero intraoral scanners, and dental CAD/CAM software for orthodontic and restorative treatments.
Why Do We Think Twice About ALGN?
- Disappointing clear aligner shipments over the past two years imply it may need to invest in improvements to get back on track
- Free cash flow margin shrank by 9.4 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $167.50 per share, Align Technology trades at 15.5x forward P/E. Check out our free in-depth research report to learn more about why ALGN doesn’t pass our bar.
Two Stocks to Watch:
Carvana (CVNA)
Consensus Price Target: $481.27 (1.6% implied return)
Known for its glass tower car vending machines, Carvana (NYSE: CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.
Why Should CVNA Be on Your Watchlist?
- Has the opportunity to boost monetization through new features and premium offerings as its retail units sold have grown by 31.4% annually over the last two years
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 38.5% annually, topping its revenue gains
- Free cash flow margin increased by 19.3 percentage points over the last few years, giving the company more capital to invest or return to shareholders
Carvana is trading at $473.61 per share, or 26.5x forward EV/EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Moody's (MCO)
Consensus Price Target: $575.53 (9.6% implied return)
Founded in 1900 during America's railroad boom when investors needed reliable information on bond risks, Moody's (NYSE: MCO) provides credit ratings, risk assessment tools, and analytical solutions that help organizations evaluate financial risks and make informed investment decisions.
Why Is MCO a Good Business?
- Solid 14.5% annual revenue growth over the last two years indicates its offering’s solve complex business issues
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Industry-leading 63.8% return on equity demonstrates management’s skill in finding high-return investments
Moody’s stock price of $525.05 implies a valuation ratio of 32.4x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. 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 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
