Market swings can be tough to stomach, and volatile stocks often experience exaggerated moves in both directions. While many thrive during risk-on environments, many also struggle to maintain investor confidence when the ride gets bumpy.
At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. Keeping that in mind, here are three volatile stocks best left to the gamblers and some better opportunities instead.
Qualys (QLYS)
Rolling One-Year Beta: 1.17
Founded in 1999 as one of the first subscription security companies, Qualys (NASDAQ: QLYS) provides organizations with software to assess their exposure to cyber-attacks.
Why Does QLYS Give Us Pause?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 5.2% underwhelmed
- Estimated sales growth of 6.6% for the next 12 months implies demand will slow from its three-year trend
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 6.9 percentage points over the next year
At $137.35 per share, Qualys trades at 7.6x forward price-to-sales. Read our free research report to see why you should think twice about including QLYS in your portfolio.
Great Lakes Dredge & Dock (GLDD)
Rolling One-Year Beta: 1.55
Founded as Lydon & Drews dredging company, Great Lakes Dredge & Dock (NASDAQ: GLDD) provides dredging services, land reclamation, and coastal protection projects in the United States and internationally.
Why Should You Dump GLDD?
- 1.8% annual revenue growth over the last five years was slower than its industrials peers
- Free cash flow margin dropped by 16.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Great Lakes Dredge & Dock is trading at $11.29 per share, or 16.2x forward P/E. To fully understand why you should be careful with GLDD, check out our full research report (it’s free).
NeoGenomics (NEO)
Rolling One-Year Beta: 1.08
Operating a network of CAP-accredited and CLIA-certified laboratories across the United States and United Kingdom, NeoGenomics (NASDAQ: NEO) provides specialized cancer diagnostic testing services, including genetic analysis, molecular testing, and pathology consultation for oncologists and healthcare providers.
Why Should You Sell NEO?
- Earnings per share fell by 12% annually over the last five years while its revenue grew, partly because it diluted shareholders
- Negative returns on capital show that some of its growth strategies have backfired, and its falling returns suggest its earlier profit pools are drying up
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
NeoGenomics’s stock price of $7.30 implies a valuation ratio of 32.9x forward P/E. Dive into our free research report to see why there are better opportunities than NEO.
Stocks We Like More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
