Volatility cuts both ways - while it creates opportunities, it also increases risk, making sharp declines just as likely as big gains. This unpredictability can shake out even the most experienced investors.

At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. That said, here are two volatile stocks that could reward patient investors and one best left to the gamblers.

One Stock to Sell:

nLIGHT (LASR)

Rolling One-Year Beta: 1.29

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 Do We Steer Clear of LASR?

1. Annual sales declines of 5.8% for the past two years show its products and services struggled to connect with the market during this cycle
2. Free cash flow margin shrank by 5.7 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

nLIGHT is trading at $18.70 per share, or 4.1x forward price-to-sales. If you’re considering LASR for your portfolio, see our FREE research report to learn more.

Two Stocks to Watch:

Freshworks (FRSH)

Rolling One-Year Beta: 1.80

Founded in Chennai, India in 2010 with the idea of creating a “fresh” helpdesk product, Freshworks (NASDAQ: FRSH) offers a broad range of software targeted at small and medium-sized businesses.

Why Do We Like FRSH?

1. ARR growth averaged 19.7% over the last year, showing customers are willing to take multi-year bets on its offerings
2. Superior software functionality and low servicing costs lead to a premier gross margin of 84.4%
3. Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient

At $15.49 per share, Freshworks trades at 5.5x forward price-to-sales. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

Tenet Healthcare (THC)

Rolling One-Year Beta: 1.05

With a network spanning nine states and serving primarily urban and suburban communities, Tenet Healthcare (NYSE: THC) operates a nationwide network of hospitals, ambulatory surgery centers, and outpatient facilities providing acute care and specialty healthcare services.

Why Are We Positive On THC?

1. Share repurchases over the last five years enabled its annual earnings per share growth of 30.7% to outpace its revenue gains
2. ROIC punches in at 21%, illustrating management’s expertise in identifying profitable investments, and its returns are growing as it capitalizes on even better market opportunities
3. Rising returns on capital show management is finding more attractive investment opportunities

Tenet Healthcare’s stock price of $171.48 implies a valuation ratio of 13.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

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 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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