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. Keeping that in mind, here are three volatile stocks to steer clear of and a few better alternatives.
Wayfair (W)
Rolling One-Year Beta: 2.30
Founded in 2002 by Niraj Shah, Wayfair (NYSE: W) is a leading online retailer of mass-market home goods in the US, UK, Canada, and Germany.
Why Are We Out on W?
- Intense competition is diverting traffic from its platform as its active customers fell by 2.1% annually
- Gross margin of 30.5% reflects its high servicing costs
- High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Wayfair’s stock price of $44.90 implies a valuation ratio of 11.5x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than W.
Sleep Number (SNBR)
Rolling One-Year Beta: 3.08
Known for mattresses that can be adjusted with regards to firmness, Sleep Number (NASDAQ: SNBR) manufactures and sells its own brand of bedding products such as mattresses, bed frames, and pillows.
Why Should You Dump SNBR?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Sales are projected to tank by 4.6% over the next 12 months as demand evaporates further
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
At $9.63 per share, Sleep Number trades at 2.1x forward EV-to-EBITDA. To fully understand why you should be careful with SNBR, check out our full research report (it’s free).
Integra LifeSciences (IART)
Rolling One-Year Beta: 1.19
Founded in 1989 as a pioneer in regenerative medicine technology, Integra LifeSciences (NASDAQ: IART) develops and manufactures medical technologies for neurosurgery, wound care, and surgical reconstruction, including regenerative tissue products and surgical instruments.
Why Is IART Risky?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 1.2% annually while its revenue grew
- Free cash flow margin shrank by 17.1 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Integra LifeSciences is trading at $13.57 per share, or 5.2x forward P/E. Read our free research report to see why you should think twice about including IART in your portfolio.
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 9 Market-Beating Stocks. 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 Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
