The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. On that note, here are three stocks getting more buzz than they deserve and some you should buy instead.
Victoria's Secret (VSCO)
One-Month Return: +17.7%
Spun off from L Brands in 2020, Victoria’s Secret (NYSE: VSCO) is an intimate clothing and beauty retailer that sells its own brands of lingerie, undergarments, and personal fragrances.
Why Is VSCO Risky?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Subpar operating margin of 4.5% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Earnings per share have dipped by 23.9% annually over the past three years, which is concerning because stock prices follow EPS over the long term
Victoria's Secret is trading at $25.89 per share, or 13.7x forward P/E. To fully understand why you should be careful with VSCO, check out our full research report (it’s free).
American Eagle (AEO)
One-Month Return: +46.2%
With a heavy focus on denim, American Eagle Outfitters (NYSE: AEO) is a specialty retailer offering an assortment of apparel and accessories to young adults.
Why Are We Hesitant About AEO?
- Muted 3.9% annual revenue growth over the last six years shows its demand lagged behind its consumer retail peers
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up
At $17.81 per share, American Eagle trades at 16.5x forward P/E. Read our free research report to see why you should think twice about including AEO in your portfolio.
Vimeo (VMEO)
One-Month Return: +86.5%
Originally launched in 2004 as a platform for filmmakers seeking a high-quality alternative to YouTube, Vimeo (NASDAQ: VMEO) provides cloud-based video creation, editing, hosting, and distribution software that helps businesses and creators make, manage, and share professional-quality videos.
Why Are We Cautious About VMEO?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
- Revenue base of $415.4 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Negative returns on capital show management lost money while trying to expand the business
Vimeo’s stock price of $7.74 implies a valuation ratio of 41.6x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why VMEO doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
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).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% 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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