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 may be overlooking some important risks and some alternatives with better fundamentals.

Lithia (LAD)

Consensus Price Target: $389.60 (42.6% implied return)

With a strong presence in the Western US, Lithia Motors (NYSE: LAD) sells a wide range of vehicles, including new and used cars, trucks, SUVs, and luxury vehicles from various manufacturers.

Why Does LAD Worry Us?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
2. Gross margin of 15.5% is an output of its commoditized inventory
3. 8× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

At $273.22 per share, Lithia trades at 7.6x forward P/E. Check out our free in-depth research report to learn more about why LAD doesn’t pass our bar.

Builders FirstSource (BLDR)

Consensus Price Target: $127.29 (31.9% implied return)

Headquartered in Irving, TX, Builders FirstSource (NYSE: BLDR) is a construction materials manufacturer that offers a variety of lumber and lumber-related building products.

Why Is BLDR Risky?

1. Annual sales declines of 5.7% for the past two years show its products and services struggled to connect with the market during this cycle
2. Sales were less profitable over the last two years as its earnings per share fell by 31.4% annually, worse than its revenue declines
3. Waning returns on capital imply its previous profit engines are losing steam

Builders FirstSource’s stock price of $96.50 implies a valuation ratio of 16.5x forward P/E. If you’re considering BLDR for your portfolio, see our FREE research report to learn more.

Hewlett Packard Enterprise (HPE)

Consensus Price Target: $26.01 (20.6% implied return)

Born from the 2015 split of the iconic Silicon Valley pioneer Hewlett-Packard, Hewlett Packard Enterprise (NYSE: HPE) provides edge-to-cloud technology solutions that help businesses capture, analyze, and act upon their data across hybrid IT environments.

Why Are We Wary of HPE?

1. Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 4.9% over the last five years was below our standards for the business services sector
2. Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 5.5% annually
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 10.5 percentage points

Hewlett Packard Enterprise is trading at $21.58 per share, or 9.2x forward P/E. Dive into our free research report to see why there are better opportunities than HPE.

Stocks We Like 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.

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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 Kadant (+351% five-year return). Find your next big winner with StockStory today.