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. That said, here are three volatile stocks to avoid and some better opportunities instead.
Photronics (PLAB)
Rolling One-Year Beta: 1.23
Sporting a global footprint of facilities, Photronics (NASDAQ: PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.
Why Are We Wary of PLAB?
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Gross margin of 36.2% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
Photronics is trading at $21.10 per share, or 11.1x forward P/E. If you’re considering PLAB for your portfolio, see our FREE research report to learn more.
Shoe Carnival (SCVL)
Rolling One-Year Beta: 1.10
Known for its playful atmosphere that features carnival elements, Shoe Carnival (NASDAQ: SCVL) is a retailer that sells footwear from mainstream brands for the entire family.
Why Do We Steer Clear of SCVL?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Modest revenue base of $1.14 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 18.6% annually, worse than its revenue
At $16.64 per share, Shoe Carnival trades at 9.6x forward P/E. Read our free research report to see why you should think twice about including SCVL in your portfolio.
Ralph Lauren (RL)
Rolling One-Year Beta: 1.06
Originally founded as a necktie company, Ralph Lauren (NYSE: RL) is an iconic American fashion brand known for its classic and sophisticated style.
Why Do We Pass on RL?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Subpar operating margin of 13.1% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Poor free cash flow margin of 11.3% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
Ralph Lauren’s stock price of $340.67 implies a valuation ratio of 21.6x forward P/E. Check out our free in-depth research report to learn more about why RL doesn’t pass our bar.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
