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.
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 reward patient investors and two that could just as easily collapse.
Two Stocks to Sell:
Upstart (UPST)
Rolling One-Year Beta: 3.78
Using over 2,500 data variables and trained on nearly 82 million repayment events, Upstart (NASDAQ: UPST) is an AI-powered lending platform that uses machine learning to help banks and credit unions more accurately assess borrower risk for personal loans, auto loans, and home equity lines of credit.
Why Do We Think Twice About UPST?
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Upstart’s stock price of $52.97 implies a valuation ratio of 4.5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than UPST.
AAR (AIR)
Rolling One-Year Beta: 1.12
The first third-party MRO approved by the FAA for Safety Management System Requirements, AAR (NYSE: AIR) is a provider of aircraft maintenance services
Why Are We Hesitant About AIR?
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Underwhelming 7.5% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $86.18 per share, AAR trades at 10.8x forward EV-to-EBITDA. To fully understand why you should be careful with AIR, check out our full research report (it’s free for active Edge members).
One Stock to Buy:
Sea (SE)
Rolling One-Year Beta: 1.30
Founded in 2009 and a publicly traded company since 2017, Sea (NYSE: SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.
Why Are We Backing SE?
- Paying Users have grown by 15.3% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 41.8% over the last three years outstripped its revenue performance
- Free cash flow margin jumped by 35.5 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Sea is trading at $160.99 per share, or 24.9x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
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-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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