3 Volatile Stocks We Steer Clear Of

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.

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.

NN (NNBR)

Rolling One-Year Beta: 2.62

Formerly known as Nuturn, NN (NASDAQ:NNBR) provides metal components, bearings, and plastic and rubber components to the automotive, aerospace, medical, and industrial sectors.

Why Should You Sell NNBR?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 7.4% annually over the last two years
2. Issuance of new shares over the last five years caused its earnings per share to fall by 18.8% annually
3. Cash burn makes us question whether it can achieve sustainable long-term growth

NN’s stock price of $1.63 implies a valuation ratio of 38.7x forward P/E. Dive into our free research report to see why there are better opportunities than NNBR.

Tesla (TSLA)

Rolling One-Year Beta: 1.91

Originally founded by Martin Eberhard and Marc Tarpenning in 2003, Tesla (NASDAQ:TSLA) is an electric vehicle company accelerating the world’s transition to sustainable energy.

Why Do We Pass on TSLA?

1. Tesla's scale advantage in EV production leads to gross margins that exceed incumbents such as General Motors and Ford. However, a softer macroeconomic backdrop and tariff pressures have weighed on automobile sales, which are highly cyclical.
2. The company's execution ability is a question mark given its long history of delays, such as the Cybertruck and Robotaxi launches. Its sizeable investments in projects with uncertain return timelines, like Optimus, also raise skepticism from investors.
3. On the bright side, Tesla's Megapack product solves a critical problem for utilities needing renewable energy storage solutions. This innovation has made the energy segment the most profitable and fastest-growing business line for the company.

Tesla is trading at $432.03 per share, or 209.1x forward price-to-earnings. Check out our free in-depth research report to learn more about why TSLA doesn’t pass our bar.

Myriad Genetics (MYGN)

Rolling One-Year Beta: 1.69

Founded in 1991 as one of the pioneers in translating genetic discoveries into clinical applications, Myriad Genetics (NASDAQ:MYGN) develops genetic tests that assess disease risk, guide treatment decisions, and provide insights across oncology, women's health, and mental health.

Why Do We Think MYGN Will Underperform?

1. Annual revenue growth of 6% over the last two years was below our standards for the healthcare sector
2. Negative returns on capital show that some of its growth strategies have backfired, and its decreasing returns suggest its historical profit centers are aging
3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

At $6.18 per share, Myriad Genetics trades at 119.8x forward P/E. To fully understand why you should be careful with MYGN, check out our full research report (it’s free for active Edge members).

Stocks We Like More

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