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.

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 to avoid and some better opportunities instead.

Amplitude (AMPL)

Rolling One-Year Beta: 1.47

Born out of a failed voice recognition startup by founder Spenser Skates, Amplitude (NASDAQ: AMPL) is data analytics software helping companies improve and optimize their digital products.

Why Does AMPL Worry Us?

1. Customers had second thoughts about committing to its platform over the last year as its average billings growth of 8.7% underwhelmed
2. Suboptimal cost structure is highlighted by its history of operating margin losses
3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

Amplitude’s stock price of $12.84 implies a valuation ratio of 4.9x forward price-to-sales. Read our free research report to see why you should think twice about including AMPL in your portfolio.

Penguin Solutions (PENG)

Rolling One-Year Beta: 1.88

Based in the US, Penguin Solutions (NASDAQ: PENG) is a diversified semiconductor company offering memory, digital, and LED products.

Why Do We Steer Clear of PENG?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 5% annually over the last two years
2. Subpar operating margin of 2.5% constrains its ability to invest in process improvements or effectively respond to new competitive threats
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its falling returns suggest its earlier profit pools are drying up

At $24.86 per share, Penguin Solutions trades at 14.6x forward P/E. Dive into our free research report to see why there are better opportunities than PENG.

H&E Equipment Services (HEES)

Rolling One-Year Beta: 1.61

Founded after recognizing a growth trend along the Mississippi River and opportunities developing in the earthmoving and construction equipment business, H&E (NASDAQ: HEES) offers machinery for companies to purchase or rent.

Why Do We Avoid HEES?

1. 2.1% annual revenue growth over the last five years was slower than its industrials peers
2. Issuance of new shares over the last five years caused its earnings per share to fall by 1.3% annually while its revenue grew
3. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 0.5% for the last five years

H&E Equipment Services is trading at $94.50 per share, or 6.3x forward EV-to-EBITDA. To fully understand why you should be careful with HEES, check out our full research report (it’s free).

Stocks We Like More

Donald Trump’s April 2024 "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.

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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 Comfort Systems (+782% 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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