Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. That said, here is one stock where Wall Street’s pessimism is creating a buying opportunity and two where the outlook is warranted.
Two Stocks to Sell:
Warner Bros. Discovery (WBD)
Consensus Price Target: $29.65 (9% implied return)
Formed from the merger of WarnerMedia and Discovery, Warner Bros. Discovery (NASDAQ:WBD) is a multinational media and entertainment company, offering television networks, streaming services, and film and television production.
Why Do We Steer Clear of WBD?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 14.7% over the last five years was below our standards for the consumer discretionary sector
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 8.8% for the last two years
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $27.20 per share, Warner Bros. Discovery trades at 4,806x forward P/E. Read our free research report to see why you should think twice about including WBD in your portfolio.
S&T Bancorp (STBA)
Consensus Price Target: $45.67 (0.7% implied return)
Tracing its roots back to 1902 in western Pennsylvania's industrial heartland, S&T Bancorp (NASDAQ:STBA) is a Pennsylvania-based bank holding company that provides retail and commercial banking services, cash management, trust services, and investment advisory solutions.
Why Are We Hesitant About STBA?
- Net interest income trends were unexciting over the last five years as its 4.9% annual growth was below the typical banking firm
- Estimated net interest income growth of 3.8% for the next 12 months is soft and implies weaker demand
- Flat earnings per share over the last two years lagged its peers
S&T Bancorp is trading at $45.36 per share, or 1.1x forward P/B. If you’re considering STBA for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Datadog (DDOG)
Consensus Price Target: $225.34 (-14.5% implied return)
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ:DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Why Are We Backing DDOG?
- ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
- Notable projected revenue growth of 24% for the next 12 months hints at market share gains
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
Datadog’s stock price of $263.41 implies a valuation ratio of 22.2x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.