Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here are three overhyped stocks that may correct and some you should consider instead.
UiPath (PATH)
One-Month Return: +14.3%
Starting with robotic process automation (RPA) and evolving into a comprehensive automation powerhouse, UiPath (NYSE:PATH) provides an AI-powered business automation platform that enables organizations to create software robots that mimic human actions to streamline repetitive tasks and processes.
Why Are We Hesitant About PATH?
- Revenue increased by 13.2% annually over the last two years, acceptable on an absolute basis but tepid for a software company enjoying secular tailwinds
- Products, pricing, or go-to-market strategy may need some adjustments as its 2.3% average billings growth over the last year was weak
- Estimated sales growth of 9.5% for the next 12 months implies demand will slow from its two-year trend
At $16.34 per share, UiPath trades at 5.2x forward price-to-sales. Read our free research report to see why you should think twice about including PATH in your portfolio.
CAVA (CAVA)
One-Month Return: +11.1%
Starting from a single Washington, D.C. location, CAVA (NYSE:CAVA) operates a fast-casual restaurant chain offering customizable Mediterranean-inspired dishes.
Why Do We Think Twice About CAVA?
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Push for growth has led to negative returns on capital, signaling value destruction
CAVA is trading at $58.57 per share, or 103.3x forward P/E. If you’re considering CAVA for your portfolio, see our FREE research report to learn more.
Array (ARRY)
One-Month Return: +20.9%
Going public in October 2020, Array (NASDAQ:ARRY) is a global manufacturer of ground-mounting tracking systems for utility and distributed generation solar energy projects.
Why Do We Think ARRY Will Underperform?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 9.8% annually over the last two years
- Earnings per share have contracted by 9.7% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Array’s stock price of $9.03 implies a valuation ratio of 12.3x forward P/E. Dive into our free research report to see why there are better opportunities than ARRY.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.