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.
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 is one volatile stock that could reward patient investors and two best left to the gamblers.
Two Stocks to Sell:
Royal Caribbean (RCL)
Rolling One-Year Beta: 1.79
Established in 1968, Royal Caribbean Cruises (NYSE: RCL) is a global cruise vacation company renowned for its innovative and exciting cruise experiences.
Why Does RCL Worry Us?
- Number of passenger cruise days has disappointed over the past two years, indicating weak demand for its offerings
- Free cash flow margin is forecasted to shrink by 10.1 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Royal Caribbean is trading at $318.50 per share, or 19x forward P/E. Dive into our free research report to see why there are better opportunities than RCL.
Lumen (LUMN)
Rolling One-Year Beta: 2.01
With approximately 350,000 route miles of fiber optic cable spanning North America and the Asia Pacific, Lumen Technologies (NYSE: LUMN) operates a vast fiber optic network that provides communications, cloud connectivity, security, and IT solutions to businesses and consumers.
Why Do We Think LUMN Will Underperform?
- Annual sales declines of 9.5% for the past five years show its products and services struggled to connect with the market during this cycle
- Sales were less profitable over the last five years as its earnings per share fell by 16.4% annually, worse than its revenue declines
- Free cash flow margin shrank by 9.2 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Lumen’s stock price of $7.04 implies a valuation ratio of 2.1x forward EV-to-EBITDA. To fully understand why you should be careful with LUMN, check out our full research report (it’s free for active Edge members).
One Stock to Buy:
Coastal Financial (CCB)
Rolling One-Year Beta: 1.14
Pioneering the intersection of traditional banking and financial technology in the Pacific Northwest, Coastal Financial (NASDAQ: CCB) operates as a bank holding company that provides traditional banking services and Banking-as-a-Service (BaaS) solutions to consumers and businesses.
Why Do We Love CCB?
- Annual net interest income growth of 43.2% over the last five years was superb and indicates its market share increased during this cycle
- Differentiated product suite leads to a Strong performance of its loan book leads to a High-yielding loan book and low cost of funds lead to a best-in-class net interest margin of 7.2%
- Earnings per share grew by 22.7% annually over the last five years and trumped its peers
At $103 per share, Coastal Financial trades at 3.2x forward P/B. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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 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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