Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.

While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. All that said, here are three overhyped stocks that may correct and some you should consider instead.

Coursera (COUR)

One-Month Return: +42.1%

Founded by two Stanford University computer science professors, Coursera (NYSE: COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.

Why Are We Hesitant About COUR?

1. Customer spending has dipped by 6.4% on average as it focused on growing its customers
2. Estimated sales growth of 5.6% for the next 12 months implies demand will slow from its three-year trend
3. High marketing expenses suggest it needs to spend heavily on new customer acquisition to sustain momentum

Coursera’s stock price of $12.45 implies a valuation ratio of 38.8x forward EV/EBITDA. Read our free research report to see why you should think twice about including COUR in your portfolio.

Warner Music Group (WMG)

One-Month Return: +15.5%

Launching the careers of legendary artists like Frank Sinatra, Warner Music Group (NASDAQ: WMG) is a music company managing a diverse portfolio of artists, recordings, and music publishing services worldwide.

Why Are We Cautious About WMG?

1. Annual revenue growth of 4.4% over the last two years was below our standards for the consumer discretionary sector
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 3.7%
3. ROIC of 10.6% reflects management’s challenges in identifying attractive investment opportunities

Warner Music Group is trading at $31.47 per share, or 10.8x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why WMG doesn’t pass our bar.

Sunrun (RUN)

One-Month Return: +31.2%

Helping homeowners use solar energy to power their homes, Sunrun (NASDAQ: RUN) provides residential solar electricity, specializing in panel installation and leasing services.

Why Are We Wary of RUN?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 7.1% annually over the last two years
2. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

At $10.73 per share, Sunrun trades at 15.4x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than RUN.

Stocks We Like More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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.

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