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 are three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.
Universal Health Services (UHS)
Consensus Price Target: $221.44 (28.1% implied return)
With a network spanning 39 states and three countries, Universal Health Services (NYSE:UHS) operates acute care hospitals and behavioral health facilities across the United States, United Kingdom, and Puerto Rico.
Why Are We Wary of UHS?
- Lagging comparable store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 1.3 percentage points
- Poor free cash flow margin of 4.1% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $172.92 per share, Universal Health Services trades at 8.4x forward P/E. If you’re considering UHS for your portfolio, see our FREE research report to learn more.
Kyndryl (KD)
Consensus Price Target: $46.25 (56.8% implied return)
Born from IBM's managed infrastructure services business in a 2021 spinoff, Kyndryl (NYSE:KD) is the world's largest IT infrastructure services provider that designs, builds, and manages technology environments for enterprise customers.
Why Does KD Fall Short?
- Sales tumbled by 4.6% annually over the last five years, showing market trends are working against its favor during this cycle
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 1.4% for the last five years
- Push for growth has led to negative returns on capital, signaling value destruction
Kyndryl’s stock price of $29.50 implies a valuation ratio of 10.9x forward P/E. Check out our free in-depth research report to learn more about why KD doesn’t pass our bar.
TransUnion (TRU)
Consensus Price Target: $113.42 (32.5% implied return)
One of the three major credit bureaus in the United States alongside Equifax and Experian, TransUnion (NYSE:TRU) is a global information and insights company that provides credit reports, fraud prevention tools, and data analytics to help businesses make decisions and consumers manage their financial health.
Why Are We Cautious About TRU?
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 2.7 percentage points
- Free cash flow margin shrank by 8.9 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its decreasing returns suggest its historical profit centers are aging
TransUnion is trading at $85.59 per share, or 19.5x forward P/E. To fully understand why you should be careful with TRU, check out our full research report (it’s free).
Stocks We Like More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% 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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