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 best left to the gamblers and some better opportunities instead.
Old Dominion Freight Line (ODFL)
Rolling One-Year Beta: 1.23
With its name deriving from the Commonwealth of Virginia’s nickname, Old Dominion (NASDAQ: ODFL) delivers less-than-truckload (LTL) and full-container load freight.
Why Are We Wary of ODFL?
- Declining unit sales over the past two years suggest it might have to lower prices to accelerate growth
- Earnings per share have contracted by 5.5% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Eroding returns on capital suggest its historical profit centers are aging
Old Dominion Freight Line is trading at $139 per share, or 25.6x forward P/E. Check out our free in-depth research report to learn more about why ODFL doesn’t pass our bar.
The Toro Company (TTC)
Rolling One-Year Beta: 1.18
Ceasing all production to support the war effort during World War II, Toro (NYSE: TTC) offers outdoor equipment for residential, commercial, and agricultural use.
Why Do We Steer Clear of TTC?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.4% annually over the last two years
- Free cash flow margin dropped by 5.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $77.44 per share, The Toro Company trades at 17.1x forward P/E. If you’re considering TTC for your portfolio, see our FREE research report to learn more.
First Advantage (FA)
Rolling One-Year Beta: 1.21
Processing approximately 100 million background checks annually across more than 200 countries and territories, First Advantage (NASDAQ: FA) provides employment background screening, identity verification, and compliance solutions to help companies manage hiring risks.
Why Does FA Fall Short?
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
- Free cash flow margin shrank by 16.5 percentage points over the last five years, suggesting the company stepped up its investments to maintain its competitive edge
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
First Advantage’s stock price of $15.20 implies a valuation ratio of 14.6x forward P/E. To fully understand why you should be careful with FA, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
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.
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