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 excitement appears well-founded and two where analysts may be overlooking some important risks.
Two Stocks to Sell:
Trupanion (TRUP)
Consensus Price Target: $39.75 (74.5% implied return)
Born from a vision to help pet owners avoid economic euthanasia when faced with expensive veterinary bills, Trupanion (NASDAQ: TRUP) provides medical insurance for cats and dogs through data-driven, vertically-integrated products priced specifically for each pet's unique characteristics.
Why Are We Cautious About TRUP?
- 1.5% annual book value per share growth over the last five years was slower than its insurance peers
- Estimated book value per share growth of 3.4% for the next 12 months implies profitability will slow from its two-year trend
- Push for growth has led to negative returns on capital, signaling value destruction
At $22.77 per share, Trupanion trades at 2.5x forward P/B. If you’re considering TRUP for your portfolio, see our FREE research report to learn more.
Dolby Laboratories (DLB)
Consensus Price Target: $78.33 (44.3% implied return)
Known for its iconic "D" logo that appears before countless movies and TV shows, Dolby Laboratories (NYSE: DLB) designs and licenses audio and video technologies that enhance entertainment experiences in movies, TV shows, music, and other media.
Why Should You Dump DLB?
- Annual revenue growth of 2.1% over the last five years was well below our standards for the software sector
- Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 2 percentage points
Dolby Laboratories is trading at $54.29 per share, or 3.7x forward price-to-sales. To fully understand why you should be careful with DLB, check out our full research report (it’s free).
One Stock to Watch:
WD-40 (WDFC)
Consensus Price Target: $249.50 (31.4% implied return)
Short for “Water Displacement perfected on the 40th try”, WD-40 (NASDAQ: WDFC) is a renowned American consumer goods company known for its iconic and versatile spray, WD-40 Multi-Use Product.
Why Should WDFC Be on Your Watchlist?
- Products command premium prices and lead to a stellar gross margin of 54.9%
- WDFC is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
- Industry-leading 26.1% return on capital demonstrates management’s skill in finding high-return investments, and its returns are growing as it capitalizes on even better market opportunities
WD-40’s stock price of $189.90 implies a valuation ratio of 33.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks - FREE. Get Our Strong Momentum 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.
