Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.
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.
Five9 (FIVN)
One-Month Return: +8.5%
Taking its name from the "five nines" (99.999%) standard for optimal service reliability in telecommunications, Five9 (NASDAQ: FIVN) provides cloud-based software that enables businesses to run their contact centers with tools for customer service, sales, and marketing across multiple communication channels.
Why Do We Steer Clear of FIVN?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 9.4% underwhelmed
- Estimated sales growth of 10.1% for the next 12 months implies demand will slow from its two-year trend
- Sky-high servicing costs result in an inferior gross margin of 55.5% that must be offset through increased usage
Five9 is trading at $23.11 per share, or 1.7x forward price-to-sales. Check out our free in-depth research report to learn more about why FIVN doesn’t pass our bar.
Conagra (CAG)
One-Month Return: +10.6%
Founded in 1919 as Nebraska Consolidated Mills in Omaha, Nebraska, Conagra Brands today (NYSE: CAG) boasts a diverse portfolio of packaged foods brands that includes everything from whipped cream to jarred pickles to frozen meals.
Why Should You Dump CAG?
- Shrinking unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Operating margin declined by 26.2 percentage points over the last year as its sales cratered
Conagra’s stock price of $14.86 implies a valuation ratio of 10.3x forward P/E. To fully understand why you should be careful with CAG, check out our full research report (it’s free).
Under Armour (UAA)
One-Month Return: +17.4%
Founded in 1996 by a former University of Maryland football player, Under Armour (NYSE: UAA) is an apparel brand specializing in sportswear designed to improve athletic performance.
Why Are We Out on UAA?
- Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $7.27 per share, Under Armour trades at 65.5x forward P/E. Dive into our free research report to see why there are better opportunities than UAA.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
