3 Volatile Stocks with Questionable Fundamentals

A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south. While some investors embrace risk, mistakes can be costly for those who aren’t prepared.

At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. That said, here are three volatile stocks to avoid and some better opportunities instead.

Xponential Fitness (XPOF)

Rolling One-Year Beta: 1.81

Owner of CycleBar, Rumble, and Club Pilates, Xponential Fitness (NYSE:XPOF) is a boutique fitness brand offering diverse and specialized exercise experiences.

Why Does XPOF Worry Us?

1. Annual revenue growth of 9.3% over the last two years was below our standards for the consumer discretionary sector
2. Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
3. Negative returns on capital show management lost money while trying to expand the business

Xponential Fitness’s stock price of $10.64 implies a valuation ratio of 9.4x forward P/E. Check out our free in-depth research report to learn more about why XPOF doesn’t pass our bar.

MasTec (MTZ)

Rolling One-Year Beta: 1.66

Involved in the 1996 Olympic Games MasTec (NYSE:MTZ) is an infrastructure construction company that specializes in the telecommunications, energy, and utility industries.

Why Are We Wary of MTZ?

1. Gross margin of 13.2% is below its competitors, leaving less money to invest in areas like marketing and R&D
2. Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
3. Free cash flow margin dropped by 4.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up

At $173 per share, MasTec trades at 29.4x forward P/E. If you’re considering MTZ for your portfolio, see our FREE research report to learn more.

Hillenbrand (HI)

Rolling One-Year Beta: 1.57

Hillenbrand, Inc. (NYSE: HI) is an industrial company that designs, manufactures, and sells highly engineered processing equipment and solutions for various industries.

Why Do We Think HI Will Underperform?

1. Sales trends were unexciting over the last five years as its 7.2% annual growth was below the typical industrials company
2. Incremental sales over the last two years were much less profitable as its earnings per share fell by 5.9% annually while its revenue grew
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 14.7 percentage points

Hillenbrand is trading at $22.29 per share, or 8.7x forward P/E. Dive into our free research report to see why there are better opportunities than HI.

High-Quality Stocks for All Market Conditions

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 183% over the last five years (as of March 31st 2025).

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 Kadant (+351% 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

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