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.
Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. Keeping that in mind, here are three volatile stocks to steer clear of and a few better alternatives.
DocuSign (DOCU)
Rolling One-Year Beta: 1.29
Creating the digital equivalent of "sign on the dotted line" for over a billion users worldwide, DocuSign (NASDAQ: DOCU) provides an agreement management platform that enables businesses to electronically prepare, sign, and manage documents and contracts.
Why Does DOCU Give Us Pause?
- ARR growth averaged a weak 8.3% over the last year, suggesting that competition is pulling some attention away from its software
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 6.6%
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
DocuSign’s stock price of $69.50 implies a valuation ratio of 4.5x forward price-to-sales. To fully understand why you should be careful with DOCU, check out our full research report (it’s free for active Edge members).
Perella Weinberg (PWP)
Rolling One-Year Beta: 1.60
Founded in 2006 by veteran investment bankers Joseph Perella and Peter Weinberg during a wave of boutique advisory firm launches, Perella Weinberg Partners (NASDAQ: PWP) is a global independent advisory firm that provides strategic and financial advice to corporations, financial sponsors, and government institutions.
Why Do We Avoid PWP?
- Earnings per share have dipped by 30% annually over the past four years, which is concerning because stock prices follow EPS over the long term
- Negative return on equity shows that some of its growth strategies have backfired
At $19.01 per share, Perella Weinberg trades at 15.6x forward P/E. Dive into our free research report to see why there are better opportunities than PWP.
Equitable Holdings (EQH)
Rolling One-Year Beta: 1.19
Tracing its roots back to 1859 as one of America's oldest financial institutions, Equitable Holdings (NYSE: EQH) provides retirement planning, asset management, and life insurance products through its two main franchises, Equitable and AllianceBernstein.
Why Do We Think EQH Will Underperform?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Day-to-day expenses have swelled relative to revenue over the last two years as its pre-tax profit margin fell by 15.6 percentage points
- Products and services are facing significant credit quality challenges during this cycle as book value per share has declined by 162% annually over the last five years
Equitable Holdings is trading at $44.61 per share, or 5.8x forward P/E. Read our free research report to see why you should think twice about including EQH in your portfolio.
Stocks We Like 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 6 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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