The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to new product launches, positive news, or even a dedicated social media following.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. On that note, here are three stocks getting more buzz than they deserve and some you should buy instead.
Nextdoor (KIND)
One-Month Return: +18.9%
Helping residents figure out what's happening on their block in real time, Nextdoor (NYSE: KIND) is a social network that connects neighbors with each other and with local businesses.
Why Do We Pass on KIND?
- Choice to prioritize new users over monetization has resulted in weak growth in its average revenue per user
- Suboptimal cost structure is highlighted by its history of EBITDA margin losses
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
Nextdoor’s stock price of $1.89 implies a valuation ratio of 3.5x forward price-to-gross profit. If you’re considering KIND for your portfolio, see our FREE research report to learn more.
Jack in the Box (JACK)
One-Month Return: +40.2%
Delighting customers since its inception in 1951, Jack in the Box (NASDAQ: JACK) is a distinctive fast-food chain known for its bold flavors, innovative menu items, and quirky marketing.
Why Is JACK Risky?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
- Efficiency has decreased over the last year as its operating margin fell by 24.2 percentage points
- High net-debt-to-EBITDA ratio of 10× could force the company to raise capital at unfavorable terms if market conditions deteriorate
At $25 per share, Jack in the Box trades at 4.7x forward P/E. To fully understand why you should be careful with JACK, check out our full research report (it’s free).
Alta (ALTG)
One-Month Return: +31.4%
Founded in 1984, Alta Equipment Group (NYSE: ALTG) is a provider of industrial and construction equipment and services across the Midwest and Northeast United States.
Why Do We Steer Clear of ALTG?
- 5.8% annual revenue growth over the last two years was slower than its industrials peers
- Cash-burning history makes us doubt the long-term viability of its business model
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Alta is trading at $7.83 per share, or 1.4x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why ALTG doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% 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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