Volatility cuts both ways - while it creates opportunities, it also increases risk, making sharp declines just as likely as big gains. This unpredictability can shake out even the most experienced investors.
At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. Keeping that in mind, here are three volatile stocks to steer clear of and a few better alternatives.
Wix (WIX)
Rolling One-Year Beta: 1.17
Founded in 2006 in Tel Aviv, Wix.com (NASDAQ: WIX) offers a free and easy to operate website building platform.
Why Does WIX Worry Us?
- 11.5% annual revenue growth over the last three years was slower than its software peers
- Steep infrastructure costs and weaker unit economics for a software company are reflected in its low gross margin of 68.1%
Wix is trading at $146.79 per share, or 4.3x forward price-to-sales. Read our free research report to see why you should think twice about including WIX in your portfolio.
Vicor (VICR)
Rolling One-Year Beta: 1.84
Founded by a researcher at the Massachusetts Institute of Technology, Vicor (NASDAQ: VICR) provides electrical power conversion and delivery products for a range of industries.
Why Are We Cautious About VICR?
- Sales tumbled by 5% annually over the last two years, showing market trends are working against its favor during this cycle
- Performance over the past two years was negatively impacted by new share issuances as its earnings per share dropped by 12.9% annually, worse than its revenue
- Waning returns on capital imply its previous profit engines are losing steam
Vicor’s stock price of $46.69 implies a valuation ratio of 29.1x forward P/E. Dive into our free research report to see why there are better opportunities than VICR.
Insight Enterprises (NSIT)
Rolling One-Year Beta: 1.20
With over 35 years of IT expertise and partnerships with more than 8,000 technology providers, Insight Enterprises (NASDAQ: NSIT) provides end-to-end digital transformation solutions that help businesses modernize their IT infrastructure and maximize the value of technology.
Why Do We Avoid NSIT?
- Sales tumbled by 8.7% annually over the last two years, showing market trends are working against its favor during this cycle
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 1.6% annually
- Poor free cash flow margin of 3.5% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $135 per share, Insight Enterprises trades at 13.7x forward P/E. To fully understand why you should be careful with NSIT, check out our full research report (it’s free).
Stocks We Like More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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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