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 is one stock where Wall Street’s positive outlook is supported by strong fundamentals and two where its enthusiasm might be excessive.
Two Stocks to Sell:
Paylocity (PCTY)
Consensus Price Target: $193.45 (25.8% implied return)
Operating in a field where companies traditionally juggled multiple disconnected systems, Paylocity (NASDAQ:PCTY) provides cloud-based human capital management and payroll software solutions that help businesses manage their workforce and HR processes.
Why Do We Think Twice About PCTY?
- Average ARR growth of 14.7% over the last year has disappointed, suggesting it’s had a hard time winning long-term deals and renewals
- Estimated sales growth of 6.8% for the next 12 months implies demand will slow from its two-year trend
- Static operating margin over the last year shows it couldn’t become more efficient
At $153.75 per share, Paylocity trades at 4.9x forward price-to-sales. If you’re considering PCTY for your portfolio, see our FREE research report to learn more.
Lovesac (LOVE)
Consensus Price Target: $24.67 (70.1% implied return)
Known for its oversized, premium beanbags, Lovesac (NASDAQ:LOVE) is a specialty furniture brand selling modular furniture.
Why Is LOVE Risky?
- Sales trends were unexciting over the last five years as its 19.5% annual growth was below the typical consumer discretionary company
- Poor free cash flow margin of 1.1% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Lovesac’s stock price of $14.50 implies a valuation ratio of 10.9x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including LOVE in your portfolio.
One Stock to Buy:
Magnite (MGNI)
Consensus Price Target: $26.86 (63.3% implied return)
Born from the 2020 merger of Rubicon Project and Telaria, Magnite (NASDAQ:MGNI) operates the world's largest independent sell-side advertising platform that automates the buying and selling of digital advertising inventory across all channels and formats.
Why Are We Bullish on MGNI?
- Impressive 30.2% annual revenue growth over the last five years indicates it’s winning market share this cycle
- MGNI is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its rising cash conversion increases its margin of safety
- Improving returns on capital suggest its past investments are beginning to deliver value
Magnite is trading at $16.45 per share, or 16.8x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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.