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. Keeping that in mind, 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:
Hexcel (HXL)
Consensus Price Target: $58.09 (11.9% implied return)
Founded shortly after World War II by a group of engineers from UC Berkley, Hexcel (NYSE: HXL) manufactures lightweight composite materials primarily for the aerospace and defense sectors.
Why Does HXL Worry Us?
- Sales tumbled by 3.8% annually over the last five years, showing market trends are working against its favor during this cycle
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- 8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $51.89 per share, Hexcel trades at 22.8x forward P/E. Dive into our free research report to see why there are better opportunities than HXL.
Two Stocks to Watch:
Roblox (RBLX)
Consensus Price Target: $74.53 (-8% implied return)
Best known for its wide assortment of user-generated content, Roblox (NYSE: RBLX) is an online gaming platform and game creation system.
Why Do We Watch RBLX?
- Daily Active Users are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Brand halo makes it a customer acquisition machine that onboards new users at scale without spending much money
- Excellent EBITDA margin of 20.5% highlights the efficiency of its business model
Roblox is trading at $81 per share, or 47.9x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Medpace (MEDP)
Consensus Price Target: $300.30 (-3.3% implied return)
Founded in 1992 as a scientifically-driven alternative to traditional contract research organizations, Medpace (NASDAQ: MEDP) provides outsourced clinical trial management and research services to help pharmaceutical, biotechnology, and medical device companies develop new treatments.
Why Does MEDP Stand Out?
- Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 17.8% over the past two years
- Share repurchases over the last five years enabled its annual earnings per share growth of 35.1% to outpace its revenue gains
- Returns on capital are climbing as management makes more lucrative bets
Medpace’s stock price of $310.55 implies a valuation ratio of 23.7x forward P/E. Is now a good time to buy? See for yourself in our full 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 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
