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.
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.
DraftKings (DKNG)
Consensus Price Target: $34.78 (41.8% implied return)
Getting its start in daily fantasy sports, DraftKings (NASDAQ: DKNG) is a digital sports entertainment and gaming company.
Why Is DKNG Risky?
- 24.3% annual revenue growth over the last two years was slower than its consumer discretionary peers
- Suboptimal cost structure is highlighted by its history of operating margin losses
- Forecasted free cash flow margin suggests the company will fail to improve its cash conversion over the next year
DraftKings’s stock price of $24.53 implies a valuation ratio of 20.4x forward P/E. Dive into our free research report to see why there are better opportunities than DKNG.
NeoGenomics (NEO)
Consensus Price Target: $16.78 (18.8% implied return)
Operating a network of CAP-accredited and CLIA-certified laboratories across the United States and United Kingdom, NeoGenomics (NASDAQ: NEO) provides specialized cancer diagnostic testing services, including genetic analysis, molecular testing, and pathology consultation for oncologists and healthcare providers.
Why Does NEO Worry Us?
- Subscale operations are evident in its revenue base of $766.3 million, meaning it has fewer distribution channels than its larger rivals
- Push for growth has led to negative returns on capital, signaling value destruction
- 6× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
At $14.13 per share, NeoGenomics trades at 46.5x forward P/E. If you’re considering NEO for your portfolio, see our FREE research report to learn more.
Cogent (CCOI)
Consensus Price Target: $21.27 (62.7% implied return)
Operating a massive network spanning 20,000 miles of fiber optic cable and connecting to over 3,200 buildings worldwide, Cogent Communications (NASDAQ: CCOI) provides high-speed Internet access, private network services, and data center colocation to businesses and bandwidth-intensive organizations across 54 countries.
Why Do We Avoid CCOI?
- Annual sales declines of 4.1% for the past two years show its products and services struggled to connect with the market during this cycle
- Eroding returns on capital suggest its historical profit centers are aging
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Cogent is trading at $13.08 per share, or 8.8x forward EV-to-EBITDA. To fully understand why you should be careful with CCOI, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
