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.

These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. That said, here are three volatile stocks to avoid and some better opportunities instead.

Advanced Energy (AEIS)

Rolling One-Year Beta: 1.92

Pioneering technologies for radio frequency power delivery, Advanced Energy (NASDAQ: AEIS) provides power supplies, thermal management systems, and measurement and control instruments for various manufacturing processes.

Why Do We Steer Clear of AEIS?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 10.4% annually over the last two years
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6.7 percentage points
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $92.99 per share, Advanced Energy trades at 18.4x forward price-to-earnings. To fully understand why you should be careful with AEIS, check out our full research report (it’s free).

TaskUs (TASK)

Rolling One-Year Beta: 2.28

Starting as a virtual assistant service in 2008 before evolving into a global digital services provider, TaskUs (NASDAQ: TASK) provides outsourced digital services including customer experience management, content moderation, and AI data services to innovative technology companies.

Why Does TASK Fall Short?

1. 1.8% annual revenue growth over the last two years was slower than its business services peers
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. Underwhelming 5.4% return on capital reflects management’s difficulties in finding profitable growth opportunities

TaskUs’s stock price of $13.05 implies a valuation ratio of 9.4x forward price-to-earnings. If you’re considering TASK for your portfolio, see our FREE research report to learn more.

Ziff Davis (ZD)

Rolling One-Year Beta: 1.99

Originally a pioneering technology publisher founded in 1927 that became famous for PC Magazine, Ziff Davis (NASDAQ: ZD) operates a portfolio of digital media brands and subscription services across technology, shopping, gaming, healthcare, and cybersecurity markets.

Why Is ZD Risky?

1. Sales stagnated over the last two years and signal the need for new growth strategies
2. 8.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

Ziff Davis is trading at $30.09 per share, or 4.1x forward price-to-earnings. Check out our free in-depth research report to learn more about why ZD doesn’t pass our bar.

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 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 Axon (+711% five-year return). Find your next big winner with StockStory today for free.