Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. Keeping that in mind, here is one stock where Wall Street’s pessimism is creating a buying opportunity and two facing legitimate challenges.
Two Stocks to Sell:
Brookdale (BKD)
Consensus Price Target: $8.30 (7.2% implied return)
With a network of over 650 communities serving approximately 59,000 residents across 41 states, Brookdale Senior Living (NYSE:BKD) operates senior living communities across the United States, offering independent living, assisted living, memory care, and continuing care retirement communities.
Why Are We Wary of BKD?
- Annual sales declines of 3.8% for the past five years show its products and services struggled to connect with the market during this cycle
- ROIC of -0.5% reflects management’s challenges in identifying attractive investment opportunities
At $7.74 per share, Brookdale trades at 4x forward EV-to-EBITDA. To fully understand why you should be careful with BKD, check out our full research report (it’s free).
Veritex Holdings (VBTX)
Consensus Price Target: $33.20 (-3.4% implied return)
Founded during the 2009 financial crisis when many banks were failing, Veritex Holdings (NASDAQGM:VBTX) operates Veritex Community Bank, providing commercial and retail banking services to small and medium-sized businesses and professionals in Texas.
Why Do We Think Twice About VBTX?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.1% annually over the last two years
- Estimated net interest income growth of 2.6% for the next 12 months implies demand will slow from its four-year trend
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
Veritex Holdings is trading at $34.37 per share, or 1.1x forward P/B. Dive into our free research report to see why there are better opportunities than VBTX.
One Stock to Watch:
McDonald's (MCD)
Consensus Price Target: $335.41 (7% implied return)
With nicknames spanning Mickey D's in the U.S. to Makku in Japan, McDonald’s (NYSE:MCD) is a fast-food behemoth known for its convenience and broken ice cream machines.
Why Does MCD Catch Our Eye?
- Rapidly increasing restaurant base reflects a desire to sell in new markets and scale quickly
- Asset-lite franchise model is reflected in its superior unit economics and a best-in-class gross margin of 57%
- MCD is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
McDonald’s stock price of $313.39 implies a valuation ratio of 24.5x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free.
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