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.
Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. That said, here is one volatile stock that could deliver huge gains and two that could just as easily collapse.
Two Stocks to Sell:
Arhaus (ARHS)
Rolling One-Year Beta: 1.36
With an aesthetic that features natural materials such as reclaimed wood, Arhaus (NASDAQ: ARHS) is a high-end furniture retailer that sells everything from sofas to rugs to bookcases.
Why Are We Cautious About ARHS?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Subscale operations are evident in its revenue base of $1.29 billion, meaning it has fewer distribution channels than its larger rivals
- Efficiency has decreased over the last year as its operating margin fell by 5 percentage points
Arhaus is trading at $9.02 per share, or 18.5x forward P/E. Check out our free in-depth research report to learn more about why ARHS doesn’t pass our bar.
Kadant (KAI)
Rolling One-Year Beta: 1.34
Headquartered in Massachusetts, Kadant (NYSE: KAI) is a global supplier of high-value, critical components and engineered systems used in process industries worldwide.
Why Are We Hesitant About KAI?
- Annual revenue growth of 7.2% over the last two years was below our standards for the industrials sector
- Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 3.4% annually
Kadant’s stock price of $325.20 implies a valuation ratio of 32.1x forward P/E. Dive into our free research report to see why there are better opportunities than KAI.
One Stock to Watch:
United Rentals (URI)
Rolling One-Year Beta: 1.47
Owning the largest rental fleet in the world, United Rentals (NYSE: URI) provides equipment rental and related services to construction, industrial, and infrastructure industries.
Why Could URI Be a Winner?
- Impressive 12.1% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Disciplined cost controls and effective management resulted in a strong long-term operating margin of 25.6%, and its operating leverage amplified its profits over the last five years
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 16.7% exceeded its revenue gains over the last five years
At $774.50 per share, United Rentals trades at 17.3x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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 9 Market-Beating Stocks. 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
