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. Keeping that in mind, here are three volatile stocks that may be too risky for most investors and some better opportunities instead.
Sensata Technologies (ST)
Rolling One-Year Beta: 1.23
Originally a temperature sensor control maker and a subsidiary of Texas Instruments for 60 years, Sensata Technology Holdings (NYSE: ST) is a leading supplier of analog sensors used in industrial and transportation applications, best known for its dominant position in the tire pressure monitoring systems in cars.
Why Are We Bearish on ST?
- Annual sales declines of 3.3% for the past two years show its products and services struggled to connect with the market during this cycle
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.4%
- High input costs result in an inferior gross margin of 29.1% that must be offset through higher volumes
Sensata Technologies’s stock price of $41.99 implies a valuation ratio of 10.8x forward P/E. Read our free research report to see why you should think twice about including ST in your portfolio.
Floor And Decor (FND)
Rolling One-Year Beta: 1.47
Operating large, warehouse-style stores, Floor & Decor (NYSE: FND) is a specialty retailer that specializes in hard flooring surfaces for the home such as tiles, hardwood, stone, and laminates.
Why Do We Avoid FND?
- Sales trends were unexciting over the last three years as its 2.3% annual growth was below the typical consumer retail company
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up
Floor And Decor is trading at $47.09 per share, or 22.5x forward P/E. Dive into our free research report to see why there are better opportunities than FND.
Warner Bros. Discovery (WBD)
Rolling One-Year Beta: 1.09
Formed from the merger of WarnerMedia and Discovery, Warner Bros. Discovery (NASDAQ: WBD) is a multinational media and entertainment company, offering television networks, streaming services, and film and television production.
Why Do We Steer Clear of WBD?
- Annual sales growth of 5.7% over the last five years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
- Poor free cash flow margin of 8.4% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Returns on capital are growing as management invests in more worthwhile ventures
At $30.11 per share, Warner Bros. Discovery trades at 153.1x forward P/E. Check out our free in-depth research report to learn more about why WBD doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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.
