At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycle of upgrades, downgrades, and "initiating coverage at neutral." Today, we'll show you whether those bigwigs actually know what they're talking about. To help, we've enlisted Motley Fool CAPS to track the long-term performance of Wall Street's best and worst.

Laugh at the pain
If the news late last and early this week was all JPMorgan Chase (NYSE: JPM), all the time, then the latter part of this week appears to be seeing a shift in focus away from banks (and their $2 billion blunders) and toward a more predictable business: Retail.

This morning, investors in Dick's Sporting Goods (NYSE: DKS) were treated to heightened expectations, as analysts at Needham & Co. raised their target price on the stock by 13.5%, to $59 a share (making for a pricey 26 P/E on a company that earned just $2.25 over the past year).

A discount on Groupon?
Yesterday saw a surge in the value of shares of electronic couponier Groupon (Nasdaq: GRPN), as the company came this close to actually booking a profit. Analysts at Citigroup and Sterne Agee moved quickly to upgrade Groupon on the news. Admittedly, some investors will question their suggestion that we buy a company that's lost more than $180 million over the past year and that, when all was said and done, still did fail to turn a profit last quarter as well.

I'm skeptical, too -- but less so than I've been in the past. Whatever the GAAP numbers might say, the fact remains that Groupon generated more than $70 or so million in free cash last quarter, a 10-fold increase over their Q1 2011 performance. At an enterprise value-to-free cash flow ratio of less than 17 today, and a projected growth rate of close to 29% for the next five years, I honestly can't say Groupon is overvalued anymore. At barely half the price it cost on IPO Day, Groupon may finally have become a steal of a deal.

Amazon's all washed up
Not so with the other big retail stock that's garnering headlines this week, however. At the same time as Sterne and Citi were starting to key in on the value at Groupon, a second pair of analysts decided to pull a Henry Blodget and make improbably optimistic predictions about the future of Amazon.com (Nasdaq: AMZN).

First up, Credit Suisse upgraded the stock to "buy" on the theory that rising costs of operation are not the threat to Amazon that everyone thinks they are. Rather, they're indicative of "increased activity delivering orders for third parties." CS thinks these costs will moderate as all the new warehouses Amazon has been building "mature," leading to "gross margin upside" and "an extended run" in the stock.

How far will Amazon run? CS argues for a $270 price target on the stock, but Topeka Capital quickly did CS one better, repeating Henry Blodget's famed number: "$400." That's a good $100 north of the second-best price target outstanding today (from Goldman Sachs).

It's also dead wrong.

Valuation matters
Listen, Fools. I've got nothing against Amazon. To the contrary, it's probably my favorite retail company out there -- as a business. But as a stock, Amazon is already woefully overpriced at 187 times earnings, and Topeka's assertion of a $400 value on the stock -- 330 times earnings -- just makes matters worse.

I mean, is Amazon a superior business, top dog in e-commerce, and a lightning-fast grower? Yes, yes, and yes. Analysts on average -- those who have more realistic expectations for the stock, at least -- estimate that over the next five years, Amazon will grow its profits at close to 30% per year. But even when viewed in the most charitable light, that's way too much to pay, even for a 30% grower.

Meanwhile, the company faces an increasing risk of losing momentum as more and more states slap sales taxes on Amazon's business.

As for Amazon's own price, it doesn't factor in this risk at all. Topeka's suggestion that investors should buy it in expectation of a near-double compounds that error and is setting investors up for a fall of epic proportions. Rather than chase Amazon up the mountain and over the cliff, investors would be better advised to stick to more reasonably priced stocks, with moats less likely to evaporate overnight. (Here are a few ideas for your perusal.)