Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
Luckily for you, StockStory helps you navigate which companies are truly worth holding. That said, here are three low-volatility stocks to avoid and some better opportunities instead.
Bentley Systems (BSY)
Rolling One-Year Beta: 0.57
Pioneering the concept of "digital twins" for infrastructure projects long before it became an industry buzzword, Bentley Systems (NASDAQ: BSY) provides software solutions that help engineers design, build, and operate infrastructure projects across sectors including roads, bridges, utilities, mining, and industrial facilities.
Why Are We Wary of BSY?
- Products, pricing, or go-to-market strategy may need some adjustments as its 11.3% average billings growth over the last year was weak
- Estimated sales growth of 9.9% for the next 12 months is soft and implies weaker demand
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
Bentley Systems is trading at $50.91 per share, or 10.9x forward price-to-sales. If you’re considering BSY for your portfolio, see our FREE research report to learn more.
The Cheesecake Factory (CAKE)
Rolling One-Year Beta: 0.82
Celebrated for its delicious (and free) brown bread, gigantic portions, and delectable desserts, Cheesecake Factory (NASDAQ: CAKE) is an iconic American restaurant chain that also owns and operates a portfolio of separate restaurant brands.
Why Do We Think Twice About CAKE?
- 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
- High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate
At $53.35 per share, The Cheesecake Factory trades at 13.4x forward P/E. Read our free research report to see why you should think twice about including CAKE in your portfolio.
Addus HomeCare (ADUS)
Rolling One-Year Beta: 0.21
Serving approximately 66,000 clients across 22 states with a focus on "dual eligible" Medicare and Medicaid beneficiaries, Addus HomeCare (NASDAQ: ADUS) provides in-home personal care, hospice, and home health services to elderly, chronically ill, and disabled individuals.
Why Does ADUS Worry Us?
- Revenue base of $1.27 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
Addus HomeCare’s stock price of $115.27 implies a valuation ratio of 17.6x forward P/E. Dive into our free research report to see why there are better opportunities than ADUS.
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 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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