Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.

But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here are three stocks that are likely overheated and some you should look into instead.

nLIGHT (LASR)

One-Month Return: +22.4%

Founded by a former CEO and Harvard-educated entrepreneur Scott Keeneyn, nLIGHT (NASDAQ: LASR) offers semiconductor and fiber lasers to the industrial, aerospace & defense, and medical sectors.

Why Should You Sell LASR?

1. Annual revenue growth of 2.6% over the last five years was below our standards for the industrials sector
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7.9 percentage points
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

nLIGHT is trading at $36.08 per share, or 144.3x forward P/E. If you’re considering LASR for your portfolio, see our FREE research report to learn more.

Olaplex (OLPX)

One-Month Return: +24.6%

Rising to fame on TikTok because of its “bond building" hair products, Olaplex (NASDAQ: OLPX) offers products and treatments that repair the damage caused by traditional heat and chemical-based styling goods.

Why Are We Hesitant About OLPX?

1. Annual sales declines of 17.3% for the past three years show its products struggled to connect with the market
2. Sales were less profitable over the last three years as its earnings per share fell by 50.8% annually, worse than its revenue declines
3. Free cash flow margin dropped by 14.7 percentage points over the last year, implying the company became more capital intensive as competition picked up

At $1.27 per share, Olaplex trades at 14x forward P/E. Dive into our free research report to see why there are better opportunities than OLPX.

Apogee (APOG)

One-Month Return: +19.4%

Involved in the design of the Apple Store on Fifth Avenue in New York City, Apogee (NASDAQ: APOG) sells architectural products and services such as high-performance glass for commercial buildings.

Why Do We Steer Clear of APOG?

1. Sales tumbled by 1.3% annually over the last two years, showing market trends are working against its favor during this cycle
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 1%
3. Earnings per share have contracted by 8.7% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance

Apogee’s stock price of $40.02 implies a valuation ratio of 10x forward P/E. Read our free research report to see why you should think twice about including APOG in your portfolio.

Stocks We Like More

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 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-small-cap company Exlservice (+354% 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.