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.
Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. That said, here are three volatile stocks best left to the gamblers and some better opportunities instead.
Domo (DOMO)
Rolling One-Year Beta: 1.79
Named for the Japanese word meaning "thank you very much," Domo (NASDAQ: DOMO) provides a cloud-based business intelligence platform that connects people with real-time data and insights across organizations.
Why Do We Steer Clear of DOMO?
- Products, pricing, or go-to-market strategy need some adjustments as its billings have averaged 1.1% declines over the last year
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
At $18.50 per share, Domo trades at 2.3x forward price-to-sales. Check out our free in-depth research report to learn more about why DOMO doesn’t pass our bar.
RH (RH)
Rolling One-Year Beta: 3.17
Formerly known as Restoration Hardware, RH (NYSE: RH) is a specialty retailer that exclusively sells its own brand of high-end furniture and home decor.
Why Is RH Not Exciting?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
RH is trading at $217.94 per share, or 16.7x forward P/E. Read our free research report to see why you should think twice about including RH in your portfolio.
BrightView (BV)
Rolling One-Year Beta: 1.12
An official field consultant for Major League Baseball, BrightView (NYSE: BV) offers landscaping design, development, and maintenance.
Why Is BV Risky?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.7% annually over the last two years
- Earnings per share have contracted by 2.5% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- 5.1 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
BrightView’s stock price of $13.37 implies a valuation ratio of 14.9x forward P/E. Dive into our free research report to see why there are better opportunities than BV.
Stocks We Like More
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Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
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