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.
Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. That said, here are three volatile stocks to steer clear of and a few better alternatives.
Norwegian Cruise Line (NCLH)
Rolling One-Year Beta: 1.61
With amenities like a full go-kart race track built into its ships, Norwegian Cruise Line (NYSE:NCLH) is a premier global cruise company.
Why Do We Think NCLH Will Underperform?
- Sluggish trends in its passenger cruise days suggest customers aren’t adopting its solutions as quickly as the company hoped
- Negative free cash flow raises questions about the return timeline for its investments
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Norwegian Cruise Line is trading at $22.76 per share, or 9x forward P/E. Check out our free in-depth research report to learn more about why NCLH doesn’t pass our bar.
Warner Bros. Discovery (WBD)
Rolling One-Year Beta: 1.57
Formed from the merger of WarnerMedia and Discovery, Warner Bros. Discovery (NASDAQ:WBD) is a multinational media and entertainment company, offering television networks, streaming services, and film and television production.
Why Do We Pass on WBD?
- Sales tumbled by 5.1% annually over the last two years, showing consumer trends are working against its favor
- Free cash flow margin is not anticipated to grow over the next year
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Warner Bros. Discovery’s stock price of $28.85 implies a valuation ratio of 11.7x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than WBD.
Cadence Bank (CADE)
Rolling One-Year Beta: 1.06
With roots dating back to 1885 and a strategic focus on middle-market commercial lending, Cadence Bancorporation (NYSE:CADE) is a bank holding company that provides commercial banking, retail banking, and wealth management services to middle-market businesses and individuals.
Why Are We Wary of CADE?
- Annual revenue growth of 4.3% over the last two years was below our standards for the banking sector
- Performance over the past five years shows its incremental sales were less profitable, as its 5.5% annual earnings per share growth trailed its revenue gains
- Estimated tangible book value per share growth of 10.6% for the next 12 months implies profitability will slow from its two-year trend
At $44.10 per share, Cadence Bank trades at 1.4x forward P/B. If you’re considering CADE for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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 Strong Momentum Stocks for this week. 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 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.