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.
These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. That said, here are three volatile stocks to avoid and some better opportunities instead.
Health Catalyst (HCAT)
Rolling One-Year Beta: 1.06
Built on its "Health Catalyst Flywheel" methodology that emphasizes measurable outcomes, Health Catalyst (NASDAQ: HCAT) provides data and analytics technology and services that help healthcare organizations manage their data and drive measurable clinical, financial, and operational improvements.
Why Are We Out on HCAT?
- Sales trends were unexciting over the last two years as its 5.4% annual growth was well below the typical software company
- Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Health Catalyst’s stock price of $2.97 implies a valuation ratio of 0.7x forward price-to-sales. Dive into our free research report to see why there are better opportunities than HCAT.
United Airlines (UAL)
Rolling One-Year Beta: 1.62
Founded in 1926, United Airlines Holdings (NASDAQ: UAL) operates a global airline network, providing passenger and cargo air transportation services across domestic and international routes.
Why Is UAL Not Exciting?
- Demand for its offerings was relatively low as its number of revenue passenger miles has underwhelmed
- Low free cash flow margin of 2.9% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- ROIC of 7.6% reflects management’s challenges in identifying attractive investment opportunities
At $97.00 per share, United Airlines trades at 9x forward P/E. Check out our free in-depth research report to learn more about why UAL doesn’t pass our bar.
NCR Atleos (NATL)
Rolling One-Year Beta: 1.13
Spun off from NCR Voyix in 2023 to focus exclusively on self-service banking technology, NCR Atleos (NYSE: NATL) provides self-directed banking solutions including ATM and interactive teller machine technology, software, services, and a surcharge-free ATM network for financial institutions and retailers.
Why Should You Dump NATL?
- Annual revenue growth of 1.8% over the last two years was below our standards for the financials sector
- Earnings per share fell by 11.8% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
NCR Atleos is trading at $39.95 per share, or 9x forward P/E. Read our free research report to see why you should think twice about including NATL in your portfolio.
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.
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