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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. Keeping that in mind, here are three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.

Flowserve (FLS)

Consensus Price Target: $70.80 (51.3% implied return)

Manufacturing the largest pump ever built for nuclear power generation, Flowserve (NYSE:FLS) manufactures and sells flow control equipment for various industries.

Why Does FLS Fall Short?

1. New orders were hard to come by as its average backlog growth of 5.6% over the past two years underwhelmed

2. Estimated sales growth of 5% for the next 12 months implies demand will slow from its two-year trend

3. Earnings growth underperformed the sector average over the last five years as its EPS grew by just 4.1% annually

At $42.50 per share, Flowserve trades at 13x forward price-to-earnings. Read our free research report to see why you should think twice about including FLS in your portfolio, it’s free.

NN (NNBR)

Consensus Price Target: $6.67 (266% implied return)

Formerly known as Nuturn, NN (NASDAQ:NNBR) provides metal components, bearings, and plastic and rubber components to the automotive, aerospace, medical, and industrial sectors.

Why Do We Pass on NNBR?

1. Flat sales over the last five years suggest it must find different ways to grow during this cycle

2. Earnings per share fell by 16.4% annually over the last five years while its revenue was flat, showing each sale was less profitable

3. Cash-burning history makes us doubt the long-term viability of its business model

NN’s stock price of $1.82 implies a valuation ratio of 1.7x forward EV-to-EBITDA. If you’re considering NNBR for your portfolio, see our FREE research report to learn more.

Fastly (FSLY)

Consensus Price Target: $8.61 (28.5% implied return)

Founded in 2011, Fastly (NYSE:FSLY) provides content delivery and edge cloud computing services, enabling enterprises and developers to deliver fast, secure, and scalable digital content and experiences.

Why Do We Avoid FSLY?

1. Annual revenue growth of 15.3% over the last three years was below our standards for the software sector

2. Sky-high servicing costs result in an inferior gross margin of 54.4% that must be offset through increased usage

3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution