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. That said, here is one stock where Wall Street’s excitement appears well-founded and two where consensus estimates seem disconnected from reality.
Two Business Services Stocks to Sell:
Interpublic Group (IPG)
Consensus Price Target: $33.20 (22.8% implied return)
With a history dating back to 1902 and roots in the McCann-Erickson agency, Interpublic Group (NYSE:IPG) is a marketing and communications holding company that owns agencies specializing in advertising, media buying, public relations, and digital marketing services.
Why Do We Pass on IPG?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Sales are projected to be flat over the next 12 months and imply weak demand
- Free cash flow margin dropped by 17.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up
At $27.04 per share, Interpublic Group trades at 9.1x forward P/E. Check out our free in-depth research report to learn more about why IPG doesn’t pass our bar.
Taboola (TBLA)
Consensus Price Target: $4.25 (37.5% implied return)
Often appearing as those "You May Also Like" or "Recommended For You" boxes at the bottom of news articles, Taboola (NASDAQ:TBLA) operates a digital platform that recommends personalized content to users across publisher websites, helping both publishers monetize their sites and advertisers reach target audiences.
Why Does TBLA Fall Short?
- Earnings growth over the last three years fell short of the peer group average as its EPS only increased by 2% annually
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2,406.2 percentage points
- Negative returns on capital show management lost money while trying to expand the business
Taboola’s stock price of $3.09 implies a valuation ratio of 7.5x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including TBLA in your portfolio.
One Business Services Stock to Buy:
EXL (EXLS)
Consensus Price Target: $53.29 (31.9% implied return)
Originally founded as an outsourcing company in 1999 before evolving into a technology-focused enterprise, EXL (NASDAQ:EXLS) provides data analytics and AI-powered digital operations solutions that help businesses transform their operations and make better decisions.
Why Will EXLS Outperform?
- Market share has increased this cycle as its 15.1% annual revenue growth over the last five years was exceptional
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
EXL is trading at $40.40 per share, or 20.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. 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).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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