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 are three volatile stocks best left to the gamblers and some better opportunities instead.

Allegro MicroSystems (ALGM)

Rolling One-Year Beta: 1.93

The result of a spinoff from Sanken in Japan, Allegro MicroSystems (NASDAQ: ALGM) is a designer of power management chips and distance sensors used in electric vehicles and data centers.

Why Do We Steer Clear of ALGM?

1. Sales tumbled by 7.6% annually over the last two years, showing market trends are working against its favor during this cycle
2. Earnings per share fell by 19.8% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Free cash flow margin shrank by 9.4 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Allegro MicroSystems is trading at $18.02 per share, or 35.9x forward price-to-earnings. To fully understand why you should be careful with ALGM, check out our full research report (it’s free).

MSA Safety (MSA)

Rolling One-Year Beta: 1.07

Founded in 1914 as Mine Safety Appliances to protect coal miners from dangerous gases, MSA Safety (NYSE: MSA) designs and manufactures advanced safety products that protect workers and facilities across industries including fire service, energy, construction, and manufacturing.

Why Does MSA Give Us Pause?

1. Subscale operations are evident in its revenue base of $1.81 billion, meaning it has fewer distribution channels than its larger rivals
2. Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
3. Eroding returns on capital suggest its historical profit centers are aging

MSA Safety’s stock price of $142.85 implies a valuation ratio of 17.7x forward price-to-earnings. Read our free research report to see why you should think twice about including MSA in your portfolio.

Knowles (KN)

Rolling One-Year Beta: 1.44

With roots dating back to 1946 and a focus on components that must perform flawlessly in critical situations, Knowles (NYSE: KN) designs and manufactures specialized electronic components like high-performance capacitors, microphones, and speakers for medical technology, defense, and industrial applications.

Why Do We Pass on KN?

1. Annual sales declines of 2.7% for the past four years show its products and services struggled to connect with the market during this cycle
2. Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
3. Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term

At $14.43 per share, Knowles trades at 12.9x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than KN.

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 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.