Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
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.
GoPro (GPRO)
One-Month Return: +14.7%
Known for sponsoring extreme athletes, GoPro (NASDAQ: GPRO) is a camera company known for its POV videos and editing software.
Why Do We Avoid GPRO?
- Performance surrounding its cameras sold has lagged its peers
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
GoPro is trading at $0.60 per share, or 9.3x forward P/E. Dive into our free research report to see why there are better opportunities than GPRO.
Boyd Gaming (BYD)
One-Month Return: +16.4%
Run by the Boyd family, Boyd Gaming (NYSE: BYD) is a diversified operator of gaming entertainment properties across the United States, offering casino games, hotel accommodations, and dining.
Why Does BYD Give Us Pause?
- Lackluster 4.1% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- ROIC of 13.8% reflects management’s challenges in identifying attractive investment opportunities
At $75.42 per share, Boyd Gaming trades at 11.7x forward P/E. Check out our free in-depth research report to learn more about why BYD doesn’t pass our bar.
Array (ARRY)
One-Month Return: +107%
Going public in October 2020, Array (NASDAQ: ARRY) is a global manufacturer of ground-mounting tracking systems for utility and distributed generation solar energy projects.
Why Do We Pass on ARRY?
- Declining unit sales over the past two years suggest it might have to lower prices to accelerate growth
- Negative free cash flow raises questions about the return timeline for its investments
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Array’s stock price of $8.45 implies a valuation ratio of 13.1x forward P/E. If you’re considering ARRY for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 176% over the last five years.
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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
