Market swings can be tough to stomach, and volatile stocks often experience exaggerated moves in both directions. While many thrive during risk-on environments, many also struggle to maintain investor confidence when the ride gets bumpy.
These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. Keeping that in mind, here is one volatile stock that could reward patient investors and two that might not be worth the risk.
Two Stocks to Sell:
Krispy Kreme (DNUT)
Rolling One-Year Beta: 1.43
Famous for its Original Glazed doughnuts and parent company of Insomnia Cookies, Krispy Kreme (NASDAQ: DNUT) is one of the most beloved and well-known fast-food chains in the world.
Why Are We Out on DNUT?
- Earnings per share have contracted by 38.7% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
- Cash burn has widened over the last year, making us question whether it can reliably generate shareholder value
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Krispy Kreme is trading at $3.11 per share, or 3.6x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than DNUT.
Northwest Pipe (NWPX)
Rolling One-Year Beta: 1.10
Playing a large role in the Integrated Pipeline (IPL) project in Texas to deliver ~350 million gallons of water per day, Northwest Pipe (NASDAQ: NWPX) is a manufacturer of pipeline systems for water infrastructure.
Why Does NWPX Give Us Pause?
- Sales trends were unexciting over the last two years as its 5.9% annual growth was below the typical industrials company
- Gross margin of 17.6% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Annual earnings per share growth of 1% underperformed its revenue over the last five years, partly because it diluted shareholders
Northwest Pipe’s stock price of $51.03 implies a valuation ratio of 15.8x forward P/E. Read our free research report to see why you should think twice about including NWPX in your portfolio.
One Stock to Buy:
Paymentus (PAY)
Rolling One-Year Beta: 1.24
Founded in 2004 to simplify the complex world of bill payments, Paymentus (NYSE: PAY) provides a cloud-based platform that helps utilities, municipalities, and service providers automate billing and payment processes.
Why Is PAY a Top Pick?
- Market share has increased this cycle as its 36.9% annual revenue growth over the last two years was exceptional
- Additional sales over the last two years increased its profitability as the 134% annual growth in its earnings per share outpaced its revenue
At $33.07 per share, Paymentus trades at 53.3x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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