Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.

While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. Keeping that in mind, here are three overhyped stocks that may correct and some you should consider instead.

Jack in the Box (JACK)

One-Month Return: +18.9%

Delighting customers since its inception in 1951, Jack in the Box (NASDAQ: JACK) is a distinctive fast-food chain known for its bold flavors, innovative menu items, and quirky marketing.

Why Do We Pass on JACK?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
2. Efficiency has decreased over the last year as its operating margin fell by 6.5 percentage points
3. High net-debt-to-EBITDA ratio of 11× increases the risk of forced asset sales or dilutive financing if operational performance weakens

At $19.88 per share, Jack in the Box trades at 5.1x forward P/E. Dive into our free research report to see why there are better opportunities than JACK.

Figs (FIGS)

One-Month Return: +53%

Rising to fame via TikTok and founded in 2013 by Heather Hasson and Trina Spear, Figs (NYSE: FIGS) is a healthcare apparel company known for its stylish approach to medical attire and uniforms.

Why Do We Avoid FIGS?

1. Sluggish trends in its active customers suggest customers aren’t adopting its solutions as quickly as the company hoped
2. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 6.4% for the last two years
3. Returns on capital are growing as management invests in more worthwhile ventures

Figs is trading at $11.30 per share, or 102.5x forward P/E. If you’re considering FIGS for your portfolio, see our FREE research report to learn more.

Progyny (PGNY)

One-Month Return: +32.1%

Pioneering a data-driven approach to family building that has achieved an industry-leading patient satisfaction score of +80, Progyny (NASDAQ: PGNY) provides comprehensive fertility and family building benefits solutions to employers, helping employees access quality fertility treatments and support services.

Why Does PGNY Give Us Pause?

1. Subscale operations are evident in its revenue base of $1.27 billion, meaning it has fewer distribution channels than its larger rivals
2. ROIC of 2.1% reflects management’s challenges in identifying attractive investment opportunities

Progyny’s stock price of $24.54 implies a valuation ratio of 13.5x forward P/E. To fully understand why you should be careful with PGNY, check out our full research report (it’s free for active Edge members).

Stocks We Like More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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

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