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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 is one stock where Wall Street’s positive outlook is supported by strong fundamentals and two where its enthusiasm might be excessive.

Two Stocks to Sell:

Privia Health (PRVA)

Operating in 13 states and the District of Columbia with over 4,300 providers serving more than 4.8 million patients, Privia Health (NASDAQ:PRVA) is a technology-driven company that helps physicians optimize their practices, improve patient experiences, and transition to value-based care models.

Why Are We Wary of PRVA?

1. Smaller revenue base of $1.74 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy

2. Negative returns on capital show management lost money while trying to expand the business

At $21.15 per share, Privia Health trades at 24.2x forward price-to-earnings. Check out our free in-depth research report to learn more about why PRVA doesn’t pass our bar.

AdaptHealth (AHCO)

With a network of approximately 680 locations serving patients across all 50 states, AdaptHealth (NASDAQ:AHCO) provides home medical equipment, supplies, and related services to patients with chronic conditions like sleep apnea, diabetes, and respiratory disorders.

Why Are We Cautious About AHCO?

1. 4.8% annual revenue growth over the last two years was slower than its healthcare peers

2. Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its shrinking returns suggest its past profit sources are losing steam

3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

AdaptHealth is trading at $8.85 per share, or 8.8x forward price-to-earnings. Read our free research report to see why you should think twice about including AHCO in your portfolio, it’s free.

One Stock to Watch:

MACOM (MTSI)

Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.