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 three volatile stocks to steer clear of and a few better alternatives.
CarGurus (CARG)
Rolling One-Year Beta: 1.07
Bringing transparency to a sometimes opaque process, CarGurus (NASDAQ:CARG) is a digital marketplace where auto dealers can connect with potential customers and where car buyers can browse, purchase, and obtain financing.
Why Are We Wary of CARG?
- Modest 2.5% annual growth in paying dealers over the last two years indicates potential challenges in customer acquisition and retention
- Demand has fallen off a cliff over the last two years as its average revenue per user fell by 8.1% annually while it struggled to expand its customer base
- Anticipated sales growth of 5.4% for the next year implies demand will be shaky
CarGurus is trading at $27.20 per share, or 8x forward EV/EBITDA. If you’re considering CARG for your portfolio, see our FREE research report to learn more.
United Rentals (URI)
Rolling One-Year Beta: 1.16
Owning the largest rental fleet in the world, United Rentals (NYSE:URI) provides equipment rental and related services to construction, industrial, and infrastructure industries.
Why Are We Cautious About URI?
- The company has faced growth challenges as its 6% annual revenue increases over the last two years fell short of other industrials companies
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 1.6% annually
- 2.1 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
At $869.05 per share, United Rentals trades at 18.6x forward P/E. To fully understand why you should be careful with URI, check out our full research report (it’s free).
Hyster-Yale Materials Handling (HY)
Rolling One-Year Beta: 1.30
Playing a significant role in the development of the hydraulic lift truck, Hyster-Yale (NYSE:HY) designs, manufactures, and sells materials handling equipment to various sectors.
Why Is HY Risky?
- Sales tumbled by 2% annually over the last two years, showing market trends are working against its favor during this cycle
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Earnings per share fell by 2.6% annually over the last five years while its revenue grew, partly because it diluted shareholders
Hyster-Yale Materials Handling’s stock price of $39.44 implies a valuation ratio of 15.2x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why HY 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 5 Growth Stocks for this month. 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.