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 are two volatile stocks that could reward patient investors and one that could just as easily collapse.
One Stock to Sell:
MGM Resorts (MGM)
Rolling One-Year Beta: 1.34
Operating several properties on the Las Vegas Strip, MGM Resorts (NYSE: MGM) is a global hospitality and entertainment company known for its resorts and casinos.
Why Do We Think MGM Will Underperform?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 7.8% for the last two years
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
- 12× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
MGM Resorts’s stock price of $31.45 implies a valuation ratio of 12.6x forward P/E. Check out our free in-depth research report to learn more about why MGM doesn’t pass our bar.
Two Stocks to Watch:
Samsara (IOT)
Rolling One-Year Beta: 1.95
From sensors on vehicles to AI-powered cameras that help prevent accidents, Samsara (NYSE: IOT) is a cloud-based Internet of Things platform that helps businesses improve the safety, efficiency, and sustainability of their physical operations.
Why Is IOT a Good Business?
- Ability to secure long-term commitments with customers is evident in its 31.8% ARR growth over the last year
- Forecasted revenue growth of 21.2% for the next 12 months indicates its momentum over the last two years is sustainable
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
Samsara is trading at $37.45 per share, or 12.2x forward price-to-sales. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
Dutch Bros (BROS)
Rolling One-Year Beta: 2.29
Started in 1992 by two brothers as a single pushcart, Dutch Bros (NYSE: BROS) is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.
Why Do We Watch BROS?
- Rapid rollout of new restaurants to capitalize on market opportunities makes sense given its strong same-store sales performance
- Same-store sales growth averaged 5.4% over the past two years, showing it’s bringing new and repeat diners into its restaurants
- Free cash flow margin jumped by 9.8 percentage points over the last year, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $48.62 per share, Dutch Bros trades at 63.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
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 Strong Momentum 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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