Wall Street has set ambitious price targets for the stocks in this article. While this suggests attractive upside potential, it’s important to remain skeptical because analysts face institutional pressures that can sometimes lead to overly optimistic forecasts.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. Keeping that in mind, here are three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.
Enphase (ENPH)
Consensus Price Target: $38.98 (41.1% implied return)
The first company to successfully commercialize the solar micro-inverter, Enphase (NASDAQ:ENPH) manufactures software-driven home energy products.
Why Are We Wary of ENPH?
- Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Free cash flow margin dropped by 9.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up
At $27.63 per share, Enphase trades at 14x forward P/E. Check out our free in-depth research report to learn more about why ENPH doesn’t pass our bar.
OPENLANE (KAR)
Consensus Price Target: $31.81 (26.5% implied return)
Facilitating the sale of approximately 1.3 million used vehicles in 2023, OPENLANE (NYSE:KAR) operates digital marketplaces that connect sellers and buyers of used vehicles across North America and Europe, facilitating wholesale transactions.
Why Are We Hesitant About KAR?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 4% annually over the last five years
- Low returns on capital reflect management’s struggle to allocate funds effectively
- 5× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
OPENLANE’s stock price of $25.15 implies a valuation ratio of 20.1x forward P/E. If you’re considering KAR for your portfolio, see our FREE research report to learn more.
Reinsurance Group of America (RGA)
Consensus Price Target: $238.30 (29.5% implied return)
Operating behind the scenes of the insurance industry since 1973, Reinsurance Group of America (NYSE:RGA) provides life and health reinsurance services to insurance companies, helping them manage risk and meet regulatory requirements.
Why Is RGA Not Exciting?
- Net premiums earned only expanded by 7.3% annually over the last two years, trailing its insurance peers as its scale limited incremental business
- Performance over the past two years shows its incremental sales were less profitable, as its 5.1% annual earnings per share growth trailed its revenue gains
- Estimated book value per share decline of 13.7% for the next 12 months implies a challenging profitability environment
Reinsurance Group of America is trading at $184.05 per share, or 1x forward P/B. Dive into our free research report to see why there are better opportunities than RGA.
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 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-small-cap company Exlservice (+354% 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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