Volatility cuts both ways - while it creates opportunities, it also increases risk, making sharp declines just as likely as big gains. This unpredictability can shake out even the most experienced investors.
These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. Keeping that in mind, here are three volatile stocks to avoid and some better opportunities instead.
Semtech (SMTC)
Rolling One-Year Beta: 2.93
A public company since the late 1960s, Semtech (NASDAQ: SMTC) is a provider of analog and mixed-signal semiconductors used for Internet of Things systems and cloud connectivity.
Why Does SMTC Worry Us?
- Efficiency has decreased over the last five years as its operating margin fell by 16 percentage points
- Free cash flow margin dropped by 10.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Push for growth has led to negative returns on capital, signaling value destruction
At $186 per share, Semtech trades at 36.1x forward P/E. If you’re considering SMTC for your portfolio, see our FREE research report to learn more.
PAR Technology (PAR)
Rolling One-Year Beta: 1.83
Originally founded in 1968 as a defense contractor for the U.S. government, PAR Technology (NYSE: PAR) provides cloud-based software, payment processing, and hardware solutions that help restaurants manage everything from point-of-sale to customer loyalty programs.
Why Is PAR Not Exciting?
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Negative returns on capital show management lost money while trying to expand the business
PAR Technology’s stock price of $14.97 implies a valuation ratio of 14.6x forward P/E. To fully understand why you should be careful with PAR, check out our full research report (it’s free).
Novavax (NVAX)
Rolling One-Year Beta: 2.34
Pioneering a nanoparticle technology that mimics the molecular structure of disease pathogens, Novavax (NASDAQ: NVAX) develops and commercializes protein-based vaccines for infectious diseases, with a primary focus on its COVID-19 vaccine and combination respiratory vaccine candidates.
Why Are We Bearish on NVAX?
- Annual sales declines of 18.9% for the past five years show its products and services struggled to connect with the market during this cycle
- Inability to adjust its cost structure while its revenue declined over the last two years led to a 26.9 percentage point drop in the company’s adjusted operating margin
- Negative free cash flow raises questions about the return timeline for its investments
Novavax is trading at $10.13 per share, or 6.9x forward price-to-sales. Dive into our free research report to see why there are better opportunities than NVAX.
Stocks We Like More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
