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Wall Street has set ambitious price targets for the stocks in this article. While this suggests attractive upside potential, it’s important to remain skeptical because analysts face institutional pressures that can sometimes lead to overly optimistic forecasts.

Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. That said, here are three stocks where Wall Street’s estimates seem disconnected from reality and some better opportunities to consider.

CarGurus (CARG)

Consensus Price Target: $38.88 (40.6% implied return)

Bringing transparency to a sometimes opaque process, CarGurus (NASDAQ:CARG) is a digital marketplace where auto dealers can connect with potential customers and where car buyers can browse, purchase, and obtain financing.

Why Do We Think Twice About CARG?

1. Paying Dealers have stagnated over the last two years, indicating its platform may be struggling to differentiate itself from competitors

2. Estimated sales growth of 5.3% for the next 12 months is soft and implies weaker demand

3. Earnings growth underperformed the sector average over the last three years as its EPS grew by just 5.2% annually

CarGurus is trading at $27.64 per share, or 10.8x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than CARG.

Bel Fuse (BELFA)

Consensus Price Target: $113 (76.3% implied return)

Founded by 26-year-old Elliot Bernstein during the electronics boom after WW2, Bel Fuse (NASDAQ:BELF.A) provides electronic systems and devices to the telecommunications, networking, transportation, and industrial sectors.

Why Are We Hesitant About BELFA?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 10% annually over the last two years

2. Earnings per share have dipped by 16.9% annually over the past two years, which is concerning because stock prices follow EPS over the long term

At $64.10 per share, Bel Fuse trades at 6.7x forward EV-to-EBITDA. To fully understand why you should be careful with BELFA, check out our full research report (it’s free).

Apogee (APOG)

Consensus Price Target: $55 (34.3% implied return)

Involved in the design of the Apple Store on Fifth Avenue in New York City, Apogee (NASDAQ:APOG) sells architectural products and services such as high-performance glass for commercial buildings.

Why Is APOG Not Exciting?

1. Sales stagnated over the last five years and signal the need for new growth strategies

2. Demand will likely be weak over the next 12 months as Wall Street expects flat revenue

3. Free cash flow margin shrank by 2.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive