1 of Wall Street’s Top Picks with Strong Fundamentals and 2 We’re Passing On

Wall Street’s Top Picks: What You Need to Know

Several stocks have recently drawn significant interest from Wall Street, with analysts projecting potential gains exceeding 20%. However, investors should approach these optimistic forecasts with caution. It’s common for analysts to issue favorable opinions to maintain strong relationships with companies, which can benefit their firms in areas like mergers and acquisitions advisory.

Independent Insights from StockStory

Unlike traditional investment banks, StockStory delivers unbiased research to help you decide which companies truly deserve your attention. Below, we highlight one stock where Wall Street’s enthusiasm seems justified, as well as two stocks where analysts may be missing critical risks.

Stocks to Consider Selling

Olaplex (OLPX)

Analyst Price Target: $2.02 (suggesting a 24% upside)

Olaplex (NASDAQ:OLPX) became a social media sensation, particularly on TikTok, for its “bond building” hair care products designed to repair damage from heat styling and chemical treatments.

Reasons for Concern with OLPX:

• Olaplex’s annual revenue has dropped by 17.3% over the past three years, signaling challenges with its competitive positioning.
• Profitability has deteriorated, with earnings per share declining by 50.8% each year—outpacing the rate of revenue decline.
• The company’s free cash flow margin fell by 14.7 percentage points in the last year, reflecting increased spending to maintain its market share.

Currently, Olaplex trades at $1.63 per share, equating to a forward P/E ratio of 18.1.

GEO Group (GEO)

Analyst Price Target: $29.50 (implying a 113% potential return)

GEO Group (NYSE:GEO) operates secure facilities, processing centers, and reentry services for government clients across the United States, Australia, and South Africa, managing around 81,000 beds in 100 locations worldwide.

Why We’re Cautious About GEO:

• Revenue growth has been sluggish, averaging just 2.3% annually over the past five years—trailing behind industry peers.
• Operational efficiency has declined, with adjusted operating margins dropping by 6.3 percentage points over the last four years.
• Free cash flow margin has contracted by 12.2 percentage points in five years, indicating higher capital requirements to remain competitive.

At $13.84 per share, GEO Group is valued at 11.2 times forward earnings.

Stock Worth Watching

Tetra Tech (TTEK)

Analyst Price Target: $43.50 (projecting a 32.2% gain)

Tetra Tech (NASDAQ:TTEK) has built a reputation over five decades for its scientific approach to consulting and engineering. With operations spanning every continent, the company specializes in water management, environmental solutions, and sustainable infrastructure for both government and commercial clients.

What Makes TTEK Stand Out?

• Tetra Tech’s market share has expanded, with annual revenue growth of 13.8% over the past five years—an impressive performance.
• Share repurchases have fueled annual earnings per share growth of 24.3% over the last two years, outpacing revenue growth.
• A robust free cash flow margin of 9.6% provides flexibility for reinvestment or shareholder returns.

The stock is currently priced at $32.91, with a forward P/E of 21.4. Is this the right moment to invest?

Top-Quality Stocks for Any Market Environment

Building a resilient portfolio means looking beyond yesterday’s winners. The risks of concentrating in a few popular stocks are increasing.

Discover the next generation of high-growth companies in our Top 5 Strong Momentum Stocks for this week. This handpicked selection of High Quality stocks has delivered a remarkable 244% return over the past five years (as of June 30, 2025).

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