Market swings can be tough to stomach, and volatile stocks often experience exaggerated moves in both directions. While many thrive during risk-on environments, many also struggle to maintain investor confidence when the ride gets bumpy.
These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. That said, here are three volatile stocks to avoid and some better opportunities instead.
nCino (NCNO)
Rolling One-Year Beta: 1.73
Founded in 2011 in North Carolina, nCino (NASDAQ: NCNO) makes cloud-based operating systems for banks and provides that software-as-a-service.
Why Are We Cautious About NCNO?
- Estimated sales growth of 6.6% for the next 12 months implies demand will slow from its three-year trend
- High servicing costs result in a relatively inferior gross margin of 60.1% that must be offset through increased usage
- Track record of operating losses stem from its decision to pursue growth instead of profits
nCino’s stock price of $22.85 implies a valuation ratio of 4.6x forward price-to-sales. If you’re considering NCNO for your portfolio, see our FREE research report to learn more.
Burlington (BURL)
Rolling One-Year Beta: 1.09
Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE: BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.
Why Does BURL Give Us Pause?
- Sizable revenue base leads to growth challenges as its 7.9% annual revenue increases over the last five years fell short of other consumer retail companies
- Capital intensity has ramped up over the last year as its free cash flow margin decreased by 4 percentage points
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $245.99 per share, Burlington trades at 26.1x forward P/E. Dive into our free research report to see why there are better opportunities than BURL.
Columbus McKinnon (CMCO)
Rolling One-Year Beta: 1.26
With 19 different brands across the globe, Columbus McKinnon (NASDAQ: CMCO) offers material handling equipment for the construction, manufacturing, and transportation industries.
Why Is CMCO Risky?
- Sales trends were unexciting over the last two years as its 2.4% annual growth was below the typical industrials company
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 3% annually while its revenue grew
- Free cash flow margin dropped by 12.8 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Columbus McKinnon is trading at $14.70 per share, or 4.7x forward P/E. To fully understand why you should be careful with CMCO, check out our full research report (it’s free).
Stocks That Overcame Trump’s 2018 Tariffs
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
