The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. Keeping that in mind, here are three overhyped stocks that may correct and some you should consider instead.
Photronics (PLAB)
One-Month Return: +13.6%
Sporting a global footprint of facilities, Photronics (NASDAQ: PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.
Why Do We Think Twice About PLAB?
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 36.2%
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 13% for the last two years
Photronics’s stock price of $25.07 implies a valuation ratio of 13.5x forward P/E. To fully understand why you should be careful with PLAB, check out our full research report (it’s free).
Sonos (SONO)
One-Month Return: +17.5%
A pioneer in connected home audio systems, Sonos (NASDAQ: SONO) offers a range of premium wireless speakers and sound systems.
Why Should You Dump SONO?
- Sales tumbled by 8% annually over the last two years, showing consumer trends are working against its favor
- Poor expense management has led to operating margin losses
- Negative returns on capital show that some of its growth strategies have backfired
Sonos is trading at $15.57 per share, or 25.5x forward P/E. Read our free research report to see why you should think twice about including SONO in your portfolio.
TTM Technologies (TTMI)
One-Month Return: +17.9%
As one of the world's largest printed circuit board manufacturers with facilities spanning North America and Asia, TTM Technologies (NASDAQ: TTMI) manufactures printed circuit boards (PCBs) and radio frequency (RF) components for aerospace, defense, automotive, and telecommunications industries.
Why Is TTMI Not Exciting?
- Sales trends were unexciting over the last five years as its 4.4% annual growth was below the typical business services company
- Free cash flow margin shrank by 6.1 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $52.40 per share, TTM Technologies trades at 23.3x forward P/E. Dive into our free research report to see why there are better opportunities than TTMI.
High-Quality Stocks for All Market Conditions
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-small-cap company Exlservice (+354% 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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