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.
These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. That said, here are three volatile stocks to avoid and some better opportunities instead.
Cars.com (CARS)
Rolling One-Year Beta: 1.33
Originally started as a joint venture between several media companies including The Washington Post and The New York Times, Cars.com (NYSE: CARS) is a digital marketplace that connects new and used car buyers and sellers.
Why Are We Wary of CARS?
- Market opportunities are plateauing as its dealer customers were flat over the last two years
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.5%
- Earnings per share have dipped by 2% annually over the past three years, which is concerning because stock prices follow EPS over the long term
Cars.com’s stock price of $11.39 implies a valuation ratio of 5x forward EV/EBITDA. If you’re considering CARS for your portfolio, see our FREE research report to learn more.
Applied Digital (APLD)
Rolling One-Year Beta: 2.87
Pivoting from its origins in cryptocurrency mining to become a key player in the AI infrastructure boom, Applied Digital (NASDAQ: APLD) designs and operates specialized data centers that provide high-performance computing infrastructure for artificial intelligence and blockchain applications.
Why Does APLD Worry Us?
- Flat earnings per share over the last three years lagged its peers
- 79.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Applied Digital is trading at $31.80 per share, or 77.2x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than APLD.
Insight Enterprises (NSIT)
Rolling One-Year Beta: 1.18
With over 35 years of IT expertise and partnerships with more than 8,000 technology providers, Insight Enterprises (NASDAQ: NSIT) provides end-to-end digital transformation solutions that help businesses modernize their IT infrastructure and maximize the value of technology.
Why Is NSIT Risky?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Anticipated sales growth of 1.3% for the next year implies demand will be shaky
- Earnings per share lagged its peers over the last two years as they only grew by 1.1% annually
At $84.32 per share, Insight Enterprises trades at 7.8x forward P/E. Check out our free in-depth research report to learn more about why NSIT doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
