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. That said, here are three volatile stocks to avoid and some better opportunities instead.
PubMatic (PUBM)
Rolling One-Year Beta: 1.98
Powering billions of daily ad impressions across the open internet, PubMatic (NASDAQ:PUBM) operates a technology platform that helps publishers maximize revenue from their digital advertising inventory while giving advertisers more control and transparency.
Why Do We Avoid PUBM?
- Net revenue retention rate of 96% shows it has a tough time retaining customers
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 18.1 percentage points over the next year
At $18.57 per share, PubMatic trades at 2.7x forward price-to-sales. Dive into our free research report to see why there are better opportunities than PUBM.
PENN Entertainment (PENN)
Rolling One-Year Beta: 1.22
Established in 1982, PENN Entertainment (NASDAQ:PENN) is a diversified American operator of casinos, sports betting, and entertainment venues.
Why Are We Out on PENN?
- 7.5% annual revenue growth over the last five years was slower than its consumer discretionary peers
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
PENN Entertainment’s stock price of $15.42 implies a valuation ratio of 15.4x forward P/E. If you’re considering PENN for your portfolio, see our FREE research report to learn more.
Viking (VIK)
Rolling One-Year Beta: 1.14
From a single river cruise offering to a fleet of 96 vessels across multiple continents, Viking (NYSE:VIK) operates a fleet of small luxury cruise ships offering river, ocean, and expedition voyages focused on cultural enrichment and destination immersion.
Why Are We Bearish on VIK?
- Sales trends were unexciting over the last two years as its 18.9% annual growth was below the typical consumer discretionary company
- Poor expense management has led to an operating margin of 22.5% that is below the industry average
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 15.1% for the last two years
Viking is trading at $80.97 per share, or 22.6x forward P/E. Read our free research report to see why you should think twice about including VIK in your portfolio.
Stocks We Like More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.