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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. That said, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.
Akamai (AKAM)
Consensus Price Target: $157.43 (43.1% implied return)
With a massive distributed network spanning 4,100+ points of presence in nearly 130 countries, Akamai Technologies (NASDAQ: AKAM) provides a global distributed cloud platform that helps businesses deliver, secure, and optimize their digital experiences online.
Why Are We Bearish on AKAM?
- Products, pricing, or go-to-market strategy may need some adjustments as its 5.7% average billings growth over the last year was weak
- Sky-high servicing costs result in an inferior gross margin of 57.5% that must be offset through increased usage
- Free cash flow margin is forecasted to shrink by 23.8 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
Akamai’s stock price of $110.03 implies a valuation ratio of 3.6x forward price-to-sales. To fully understand why you should be careful with AKAM, check out our full research report (it’s free).
Pegasystems (PEGA)
Consensus Price Target: $42.98 (28.1% implied return)
With a "Center-out Business Architecture" approach that transcends organizational silos, Pegasystems (NASDAQ: PEGA) develops software that helps organizations automate workflows and use artificial intelligence to improve customer experiences and business processes.
Why Are We Out on PEGA?
- Average billings growth of 3.6% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
- Efficiency has decreased over the last year as its operating margin fell by 6.5 percentage points
At $33.55 per share, Pegasystems trades at 3x forward price-to-sales. Read our free research report to see why you should think twice about including PEGA in your portfolio.
Pitney Bowes (PBI)
Consensus Price Target: $19.56 (20.3% implied return)
With a century-long history dating back to 1920 and processing over 15 billion pieces of mail annually, Pitney Bowes (NYSE: PBI) provides shipping, mailing technology, logistics, and financial services to businesses of all sizes.
Why Are We Wary of PBI?
- Sales tumbled by 13% annually over the last five years, showing market trends are working against it during this cycle
- Forecasted revenue decline of 1.7% for the upcoming 12 months implies demand will fall even further
Pitney Bowes is trading at $16.26 per share, or 9.5x forward P/E. If you’re considering PBI for your portfolio, see our FREE research report to learn more.
Stocks We Like More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
