3 Overrated Stocks with Questionable Fundamentals

The stocks featured in this article have all approached their 52-week highs. When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.

While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. All that said, here are three overhyped stocks that may correct and some you should consider instead.

Boot Barn (BOOT)

One-Month Return: +19.5%

With a strong store presence in Texas, California, Florida, and Oklahoma, Boot Barn (NYSE:BOOT) is a western-inspired apparel and footwear retailer.

Why Is BOOT Not Exciting?

1. 9.3% annual revenue growth over the last three years was slower than its consumer retail peers
2. Smaller revenue base of $2.07 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
3. Gross margin of 37.5% is an output of its commoditized inventory

Boot Barn is trading at $204.83 per share, or 28.8x forward P/E. Dive into our free research report to see why there are better opportunities than BOOT.

Smith & Wesson (SWBI)

One-Month Return: +30.2%

With a history dating back to 1852, Smith & Wesson (NASDAQ:SWBI) is a firearms manufacturer known for its handguns and rifles.

Why Should You Dump SWBI?

1. Annual revenue declines of 10.2% over the last five years indicate problems with its market positioning
2. Low free cash flow margin of 2.1% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

At $10.81 per share, Smith & Wesson trades at 39.3x forward P/E. Read our free research report to see why you should think twice about including SWBI in your portfolio.

Enviri (NVRI)

One-Month Return: +36.1%

Cooling America’s first indoor ice rink in the 19th century, Enviri (NYSE:NVRI) offers steel and waste handling services.

Why Do We Avoid NVRI?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
2. Cash-burning history makes us doubt the long-term viability of its business model
3. High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens

Enviri’s stock price of $18.25 implies a valuation ratio of 5.1x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why NVRI doesn’t pass our bar.

Stocks We Like More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out 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

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