A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south. While some investors embrace risk, mistakes can be costly for those who aren’t prepared.
These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. Keeping that in mind, here are three volatile stocks best left to the gamblers and some better opportunities instead.
Workday (WDAY)
Rolling One-Year Beta: 1.08
Born from the vision of PeopleSoft founders after Oracle's hostile takeover of their previous company, Workday (NASDAQ: WDAY) provides cloud-based software for financial management, human resources, planning, and analytics to help organizations manage their business operations.
Why Does WDAY Fall Short?
- Offerings struggled to generate meaningful interest as its average billings growth of 13.7% over the last year did not impress
- Estimated sales growth of 12.8% for the next 12 months implies demand will slow from its two-year trend
- Operating margin expanded by 1.5 percentage points over the last year as it scaled and became more efficient
Workday’s stock price of $242.07 implies a valuation ratio of 6.5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than WDAY.
1-800-FLOWERS (FLWS)
Rolling One-Year Beta: 1.40
Founded in 1976, 1-800-FLOWERS (NASDAQ: FLWS) is an online retailer of flowers, gifts, and gourmet foods, serving customers globally.
Why Do We Avoid FLWS?
- Sales tumbled by 8.6% annually over the last two years, showing consumer trends are working against its favor
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $4.39 per share, 1-800-FLOWERS trades at 13.1x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including FLWS in your portfolio.
Quanex (NX)
Rolling One-Year Beta: 1.18
Starting in the seamless tube industry, Quanex (NYSE: NX) manufactures building products like window, door, kitchen, and bath cabinet components.
Why Does NX Worry Us?
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 9.6% annually
- Free cash flow margin dropped by 6.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Quanex is trading at $15.06 per share, or 7.7x forward P/E. Check out our free in-depth research report to learn more about why NX doesn’t pass our bar.
Stocks We Like More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 6 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-micro-cap company Tecnoglass (+1,754% 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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