3 Low-Volatility Stocks with Questionable Fundamentals

Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.

Finding the right balance between safety and returns isn’t easy, which is why StockStory is here to help. That said, here are three low-volatility stocks to steer clear of and a few better alternatives.

Varonis Systems (VRNS)

Rolling One-Year Beta: 0.82

Beginning with protecting Windows file shares in 2005 and evolving into a comprehensive security platform, Varonis Systems (NASDAQ:VRNS) provides data security software that helps organizations protect sensitive information, detect threats, and comply with privacy regulations.

Why Is VRNS Not Exciting?

1. Sales trends were unexciting over the last two years as its 11.7% annual growth was below the typical software company
2. Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 2.7 percentage points
3. Free cash flow margin is forecasted to shrink by 1.9 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors

At $30.21 per share, Varonis Systems trades at 5.2x forward price-to-sales. If you’re considering VRNS for your portfolio, see our FREE research report to learn more.

U-Haul (UHAL)

Rolling One-Year Beta: 0.74

Founded by a husband and wife duo, U-Haul (NYSE:UHAL) is a provider of rental trucks and storage facilities.

Why Should You Sell UHAL?

1. Annual revenue growth of 1.9% over the last two years was below our standards for the industrials sector
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 34.8 percentage points
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

U-Haul’s stock price of $52.46 implies a valuation ratio of 14.8x forward EV-to-EBITDA. To fully understand why you should be careful with UHAL, check out our full research report (it’s free for active Edge members).

Hercules Capital (HTGC)

Rolling One-Year Beta: 0.80

Named after the mythological hero known for his strength, Hercules Capital (NYSE:HTGC) is a business development company that provides debt financing to venture capital-backed and growth-stage technology and life sciences companies.

Why Does HTGC Fall Short?

1. Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 1.8% annually

Hercules Capital is trading at $19.00 per share, or 9.4x forward P/E. Read our free research report to see why you should think twice about including HTGC in your portfolio.

Stocks We Like More

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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-micro-cap company Tecnoglass (+1,754% 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.