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3 Inflated Stocks Skating on Thin Ice

AMPL Cover Image

The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to new product launches, positive news, or even a dedicated social media following.

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 getting more buzz than they deserve and some you should buy instead.

Amplitude (AMPL)

One-Month Return: +31.3%

Born out of a failed voice recognition startup by founder Spenser Skates, Amplitude (NASDAQ: AMPL) is data analytics software helping companies improve and optimize their digital products.

Why Are We Hesitant About AMPL?

  1. Customers had second thoughts about committing to its platform over the last year as its average billings growth of 8.7% underwhelmed
  2. Historical operating margin losses point to an inefficient cost structure
  3. Poor free cash flow margin of 1.2% for the last year limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends

Amplitude is trading at $12.39 per share, or 4.7x forward price-to-sales. If you’re considering AMPL for your portfolio, see our FREE research report to learn more.

Portillo's (PTLO)

One-Month Return: +15%

Begun as a Chicago hot dog stand in 1963, Portillo’s (NASDAQ: PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes.

Why Is PTLO Not Exciting?

  1. Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
  2. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
  3. High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens

Portillo’s stock price of $12.02 implies a valuation ratio of 32.9x forward P/E. Read our free research report to see why you should think twice about including PTLO in your portfolio.

EVgo (EVGO)

One-Month Return: +40.4%

Created through a settlement between NRG Energy and the California Public Utilities Commission, EVgo (NASDAQ: EVGO) is a provider of electric vehicle charging solutions, operating fast charging stations across the United States.

Why Does EVGO Worry Us?

  1. Historically negative EPS is a worrisome sign for conservative investors and obscures its long-term earnings potential
  2. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
  3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

At $4 per share, EVgo trades at 33.5x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why EVGO doesn’t pass our bar.

High-Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.

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