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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. Keeping that in mind, here is one stock poised to prove Wall Street wrong and two where the skepticism is well-placed.
Two Stocks to Sell:
Columbia Sportswear (COLM)
Consensus Price Target: $56.13 (1.3% implied return)
Originally founded as a hat store in 1938, Columbia Sportswear (NASDAQ:COLM) is a manufacturer of outerwear, sportswear, and footwear designed for outdoor enthusiasts.
Why Should You Dump COLM?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- Diminishing returns on capital suggest its earlier profit pools are drying up
Columbia Sportswear’s stock price of $55.40 implies a valuation ratio of 17.3x forward P/E. Check out our free in-depth research report to learn more about why COLM doesn’t pass our bar.
Walker & Dunlop (WD)
Consensus Price Target: $92.50 (6.8% implied return)
Originating as a small mortgage banking firm during the Great Depression in 1937, Walker & Dunlop (NYSE:WD) provides commercial real estate financing, property sales, appraisal, and investment management services with a focus on multifamily properties.
Why Does WD Give Us Pause?
- Net interest income tumbled by 56.7% annually over the last five years, showing market trends are working against its favor during this cycle
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 6% annually while its revenue grew
- Products and services are facing significant credit quality challenges during this cycle as tangible book value per share has declined by 4.5% annually over the last five years
Walker & Dunlop is trading at $86.61 per share, or 1.6x forward P/B. Dive into our free research report to see why there are better opportunities than WD.
One Stock to Watch:
Warby Parker (WRBY)
Consensus Price Target: $26.23 (0.9% implied return)
Founded in 2010, Warby Parker (NYSE:WRBY) designs, manufactures, and sells eyewear, including prescription glasses, sunglasses, and contact lenses, through its e-commerce platform and physical retail locations.
Why Do We Like WRBY?
- Aggressive expansion of new stores reflects an offensive push to quickly grow and sell in markets where it has few or no locations
- Unique assortment of products and pricing power are reflected in its best-in-class gross margin of 54.9%
- Earnings growth has massively outpaced its peers over the last three years as its EPS has compounded at 68.5% annually
At $26 per share, Warby Parker trades at 73.8x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
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Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. 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).
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