3 Volatile Stocks We Find Risky

Volatility cuts both ways - while it creates opportunities, it also increases risk, making sharp declines just as likely as big gains. This unpredictability can shake out even the most experienced investors.

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 steer clear of and a few better alternatives.

8x8 (EGHT)

Rolling One-Year Beta: 1.94

Named after its founding year (1987) with "8x8" representing binary code for communications, 8x8 (NASDAQ:EGHT) provides cloud-based contact center and unified communications solutions that enable businesses to manage customer interactions and internal communications through a single platform.

Why Is EGHT Risky?

1. Customers had second thoughts about committing to its platform over the last year as its average billings growth of 1.3% underwhelmed
2. Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
3. Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment

8x8 is trading at $1.97 per share, or 0.4x forward price-to-sales. Check out our free in-depth research report to learn more about why EGHT doesn’t pass our bar.

Gap (GAP)

Rolling One-Year Beta: 1.13

Operating under the Gap, Old Navy, Banana Republic, and Athleta brands, Gap (NYSE:GAP) is an apparel and accessories retailer selling casual clothing to men, women, and children.

Why Is GAP Not Exciting?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
2. Estimated sales growth of 1.3% for the next 12 months is soft and implies weaker demand
3. ROIC of 7.1% reflects management’s challenges in identifying attractive investment opportunities

At $21 per share, Gap trades at 8.9x forward P/E. If you’re considering GAP for your portfolio, see our FREE research report to learn more.

Portillo's (PTLO)

Rolling One-Year Beta: 1.17

Begun as a Chicago hot dog stand in 1963, Portillo’s (NASDAQ:PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes.

Why Are We Hesitant About PTLO?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
2. Low free cash flow margin of -0.4% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

Portillo’s stock price of $7.53 implies a valuation ratio of 18.8x forward P/E. To fully understand why you should be careful with PTLO, check out our full research report (it’s free).

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 9 Market-Beating Stocks. 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-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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.