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. That said, here are two volatile stocks that could reward patient investors and one that might not be worth the risk.
One Stock to Sell:
Petco (WOOF)
Rolling One-Year Beta: 2.99
Historically known for its window displays of pets for sale or adoption, Petco (NASDAQ: WOOF) is a specialty retailer of pet food and supplies as well as a provider of services such as wellness checks and grooming.
Why Is WOOF Not Exciting?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Suboptimal cost structure is highlighted by its history of operating losses
- High net-debt-to-EBITDA ratio of 8× could force the company to raise capital at unfavorable terms if market conditions deteriorate
Petco is trading at $3.20 per share, or 52.2x forward P/E. If you’re considering WOOF for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
MACOM (MTSI)
Rolling One-Year Beta: 1.84
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
Why Are We Fans of MTSI?
- Market share has increased this cycle as its 9.9% annual revenue growth over the last two years was exceptional
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 21.6%
- Earnings per share grew by 83.6% annually over the last five years, massively outpacing its peers
At $123.69 per share, MACOM trades at 32.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Trane Technologies (TT)
Rolling One-Year Beta: 1.22
With low-pressure heating systems as the first product, Trane (NYSE: TT) designs, manufactures, and sells HVAC and refrigeration systems, the former to commercial and residential building customers and the latter to commercial truck manufacturers.
Why Is TT a Top Pick?
- Impressive 11.6% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- ROIC punches in at 22.9%, illustrating management’s expertise in identifying profitable investments, and its rising returns show it’s making even more lucrative bets
Trane Technologies’s stock price of $417 implies a valuation ratio of 31.8x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
