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.
Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. Keeping that in mind, here is one volatile stock with massive upside potential and two that could just as easily collapse.
Two Stocks to Sell:
FARO (FARO)
Rolling One-Year Beta: 2.54
Launched by two PhD students in a garage, FARO (NASDAQ: FARO) provides 3D measurement and imaging systems for the manufacturing, construction, engineering, and public safety industries.
Why Do We Think Twice About FARO?
- Annual sales declines of 1.5% for the past five years show its products and services struggled to connect with the market during this cycle
- Poor expense management has led to operating margin losses
- Cash burn makes us question whether it can achieve sustainable long-term growth
FARO is trading at $44 per share, or 39.6x forward P/E. Read our free research report to see why you should think twice about including FARO in your portfolio.
Credit Acceptance (CACC)
Rolling One-Year Beta: 1.23
Founded in 1972 by Donald Foss to serve customers overlooked by traditional lenders, Credit Acceptance (NASDAQ: CACC) provides auto financing solutions that enable car dealers to sell vehicles to consumers with limited or impaired credit histories.
Why Do We Steer Clear of CACC?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
- Earnings per share fell by 10% annually over the last two years while its revenue was flat, showing each sale was less profitable
- High debt-to-equity ratio of 3.9× shows the firm carries too much debt relative to shareholder equity, increasing bankruptcy risk
Credit Acceptance’s stock price of $506.49 implies a valuation ratio of 11.7x forward P/E. If you’re considering CACC for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
HubSpot (HUBS)
Rolling One-Year Beta: 1.49
Born from the idea that traditional interruptive marketing was becoming less effective, HubSpot (NYSE: HUBS) provides an integrated platform that helps businesses attract, engage, and manage customer relationships through marketing, sales, service, and content management tools.
Why Could HUBS Be a Winner?
- Billings have averaged 21.3% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable three-year growth trajectory
- Software is difficult to replicate at scale and results in a stellar gross margin of 84.6%
At $478 per share, HubSpot trades at 7.5x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound 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-small-cap company Comfort Systems (+782% 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
