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. Keeping that in mind, here is one volatile stock with massive upside potential and two that might not be worth the risk.

Two Stocks to Sell:

Methode Electronics (MEI)

Rolling One-Year Beta: 2.27

Founded in 1946, Methode Electronics (NYSE: MEI) is a global supplier of custom-engineered solutions for Original Equipment Manufacturers (OEMs).

Why Do We Avoid MEI?

1. Sales tumbled by 6.8% annually over the last two years, showing market trends are working against its favor during this cycle
2. 11.6 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

At $7.19 per share, Methode Electronics trades at 3.1x forward EV-to-EBITDA. If you’re considering MEI for your portfolio, see our FREE research report to learn more.

Affirm (AFRM)

Rolling One-Year Beta: 2.48

Founded by PayPal co-founder Max Levchin with a mission to create honest financial products, Affirm (NASDAQ: AFRM) provides a payment network that allows consumers to make purchases and pay for them over time with transparent, flexible installment loans.

Why Does AFRM Worry Us?

1. Push for growth has led to negative returns on capital, signaling value destruction
2. 6× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

Affirm’s stock price of $67.70 implies a valuation ratio of 20.9x forward P/E. To fully understand why you should be careful with AFRM, check out our full research report (it’s free for active Edge members).

One Stock to Buy:

Planet Labs (PL)

Rolling One-Year Beta: 2.29

Pioneering the concept of "agile aerospace" with hundreds of small but powerful satellites, Planet Labs (NYSE: PL) operates the world's largest fleet of Earth observation satellites, capturing daily images of our planet to provide insights on deforestation, agriculture, and climate change.

Why Is PL a Good Business?

1. Annual revenue growth of 22.3% over the past five years was outstanding, reflecting market share gains this cycle
2. Free cash flow profile has moved into positive territory over the last five years, indicating the company has passed a significant test
3. Rising returns on capital show the company is starting to reap the benefits of its past investments

Planet Labs is trading at $11.17 per share, or 1,147x forward EV-to-EBITDA. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.

High-Quality Stocks for All Market Conditions

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 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-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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