Volatility cuts both ways - while it creates opportunities, it also increases risk, making sharp declines just as likely as big gains. This unpredictability can shake out even the most experienced investors.
Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. Keeping that in mind, here are three volatile stocks to avoid and some better opportunities instead.
BeautyHealth (SKIN)
Rolling One-Year Beta: 2.76
Operating in the emerging beauty health category, the appropriately named BeautyHealth (NASDAQ: SKIN) is a skincare company best known for its Hydrafacial product that cleanses and hydrates skin.
Why Do We Avoid SKIN?
- Subscale operations are evident in its revenue base of $334.3 million, meaning it has fewer distribution channels than its larger rivals
- Historical operating losses point to an inefficient cost structure
- High net-debt-to-EBITDA ratio of 15× could force the company to raise capital at unfavorable terms if market conditions deteriorate
BeautyHealth is trading at $1.18 per share, or 8.8x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including SKIN in your portfolio.
Boeing (BA)
Rolling One-Year Beta: 1.54
One of the companies that forms a duopoly in the commercial aircraft market, Boeing (NYSE: BA) develops, manufactures, and services commercial airplanes, defense products, and space systems.
Why Are We Out on BA?
- Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
At $185.10 per share, Boeing trades at 26.3x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why BA doesn’t pass our bar.
GE HealthCare (GEHC)
Rolling One-Year Beta: 1.20
Spun off from industrial giant General Electric in 2023 after over a century as its healthcare division, GE HealthCare (NASDAQ: GEHC) provides medical imaging equipment, patient monitoring systems, diagnostic pharmaceuticals, and AI-enabled healthcare solutions to hospitals and clinics worldwide.
Why Are We Wary of GEHC?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 3.8%
- Performance over the past three years shows its incremental sales were less profitable as its earnings per share were flat
GE HealthCare’s stock price of $71.23 implies a valuation ratio of 14.6x forward P/E. Dive into our free research report to see why there are better opportunities than GEHC.
Stocks We Like More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.
