A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south. While some investors embrace risk, mistakes can be costly for those who aren’t prepared.
These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. Keeping that in mind, here is one volatile stock that could deliver huge gains and two that might not be worth the risk.
Two Stocks to Sell:
ACV Auctions (ACVA)
Rolling One-Year Beta: 1.28
Founded in 2014, ACV Auctions (NASDAQ: ACVA) is an online auction marketplace for car dealers and wholesalers to buy and sell used cars.
Why Does ACVA Give Us Pause?
- Gross margin of 26.2% reflects its high servicing costs
- Excessive marketing spend signals little organic demand and traction for its platform
- Low free cash flow margin of 2.7% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
ACV Auctions’s stock price of $11.50 implies a valuation ratio of 19.2x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than ACVA.
Flowserve (FLS)
Rolling One-Year Beta: 1.83
Manufacturing the largest pump ever built for nuclear power generation, Flowserve (NYSE: FLS) manufactures and sells flow control equipment for various industries.
Why Are We Cautious About FLS?
- Average backlog growth of 1.6% over the past two years was mediocre and suggests fewer customers signed long-term contracts
- Estimated sales growth of 5.8% for the next 12 months implies demand will slow from its two-year trend
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 5% for the last five years
At $53.22 per share, Flowserve trades at 15.5x forward P/E. Check out our free in-depth research report to learn more about why FLS doesn’t pass our bar.
One Stock to Buy:
Coinbase (COIN)
Rolling One-Year Beta: 2.98
Widely regarded as the face of crypto, Coinbase (NASDAQ: COIN) is a blockchain infrastructure company updating the financial system with its trading, staking, stablecoin, and other payment solutions.
Why Is COIN a Top Pick?
- Customers are spending more money on its platform as its average revenue per user has increased by 56.8% annually over the last two years
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 96.4% annually
- Robust free cash flow margin of 25.7% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy
Coinbase is trading at $321.10 per share, or 26.8x forward EV/EBITDA. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
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 5 Growth Stocks for this month. 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 Comfort Systems (+782% 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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