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.
At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. Keeping that in mind, here are three volatile stocks to steer clear of and a few better alternatives.
Peloton (PTON)
Rolling One-Year Beta: 2.54
Started as a Kickstarter campaign, Peloton (NASDAQ: PTON) is a fitness technology company known for its at-home exercise equipment and interactive online workout classes.
Why Should You Sell PTON?
- Number of connected fitness subscribers has disappointed over the past two years, indicating weak demand for its offerings
- Projected sales decline of 4.1% over the next 12 months indicates demand will continue deteriorating
- Historical operating margin losses point to an inefficient cost structure
Peloton’s stock price of $6.65 implies a valuation ratio of 7.8x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than PTON.
ArcBest (ARCB)
Rolling One-Year Beta: 1.24
Historically owning furniture, banking, and other subsidiaries, ArcBest (NASDAQ: ARCB) offers full-truckload, less-than-truckload, and intermodal deliveries of freight.
Why Is ARCB Risky?
- Declining unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $83.75 per share, ArcBest trades at 13.2x forward P/E. Check out our free in-depth research report to learn more about why ARCB doesn’t pass our bar.
U.S. Bancorp (USB)
Rolling One-Year Beta: 1.07
With roots dating back to 1863 and a presence across 26 states primarily in the Midwest and West, U.S. Bancorp (NYSE: USB) is one of America's largest banks providing lending, deposit services, wealth management, payment processing, and merchant services to individuals and businesses.
Why Is USB Not Exciting?
- Annual net interest income growth of 6.7% over the last four years lagged behind its bank peers as its large revenue base made it difficult to generate incremental demand
- Weak unit economics are reflected in its net interest margin of 2.8%, one of the worst among bank companies
- Large asset base makes it harder to grow tangible book value per share quickly, and its annual tangible book value per share growth of 1.3% over the last five years was below our standards for the bank sector
U.S. Bancorp is trading at $47.55 per share, or 1.3x forward P/B. To fully understand why you should be careful with USB, check out our full research report (it’s free).
Stocks We Like More
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 5 Strong Momentum 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-micro-cap company Tecnoglass (+1,754% 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
