Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Choosing the wrong investments can cause you to fall behind, which is why we started StockStory - to separate the winners from the losers. Keeping that in mind, here are three low-volatility stocks that don’t make the cut and some better opportunities instead.
Zoom (ZM)
Rolling One-Year Beta: 0.91
Once the verb that defined remote work during the pandemic ("let's Zoom later"), Zoom (NASDAQ: ZM) provides a cloud-based platform for video meetings, phone calls, team chat, and collaboration tools that helps businesses and individuals connect virtually.
Why Should You Dump ZM?
- Average billings growth of 4.4% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Competitive market dynamics make it difficult to retain customers, leading to a weak 98% net revenue retention rate
- Anticipated sales growth of 3.2% for the next year implies demand will be shaky
Zoom is trading at $82.45 per share, or 5.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than ZM.
Amphastar Pharmaceuticals (AMPH)
Rolling One-Year Beta: 0.57
Founded in 1996 and known for its expertise in complex drug formulations, Amphastar Pharmaceuticals (NASDAQ: AMPH) develops and manufactures technically challenging injectable and inhalation medications, including both generic and proprietary pharmaceutical products.
Why Are We Wary of AMPH?
- Revenue base of $722.7 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
At $27.72 per share, Amphastar Pharmaceuticals trades at 8.4x forward P/E. Check out our free in-depth research report to learn more about why AMPH doesn’t pass our bar.
Korn Ferry (KFY)
Rolling One-Year Beta: 0.94
With clients including 97% of the S&P 100 and operations in 103 offices across 51 countries, Korn Ferry (NYSE: KFY) is a global consulting firm that helps organizations design optimal structures, recruit talent, develop leaders, and create effective compensation strategies.
Why Do We Think Twice About KFY?
- Annual sales declines of 1.3% for the past two years show its products and services struggled to connect with the market during this cycle
- Estimated sales growth of 2.7% for the next 12 months is soft and implies weaker demand
- Diminishing returns on capital suggest its earlier profit pools are drying up
Korn Ferry’s stock price of $72.44 implies a valuation ratio of 14x forward P/E. Read our free research report to see why you should think twice about including KFY in your portfolio.
Stocks We Like More
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.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 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-small-cap company Exlservice (+354% 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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