2 Volatile Stocks with Promising Prospects and 1 We Find Risky

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. Keeping that in mind, here are two volatile stocks that could deliver huge gains and one that might not be worth the risk.

One Stock to Sell:

Credit Acceptance (CACC)

Rolling One-Year Beta: 1.25

Founded in 1972 by Donald Foss to serve customers overlooked by traditional lenders, Credit Acceptance (NASDAQ:CACC) provides auto financing solutions that enable car dealers to sell vehicles to consumers with limited or impaired credit histories.

Why Do We Think CACC Will Underperform?

1. Sales trends were unexciting over the last five years as its 2.9% annual growth was below the typical financials company
2. Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 5.4% annually
3. High debt-to-equity ratio of 3.9× shows the firm carries too much debt relative to shareholder equity, increasing bankruptcy risk

Credit Acceptance is trading at $460.32 per share, or 11.6x forward P/E. To fully understand why you should be careful with CACC, check out our full research report (it’s free for active Edge members).

Two Stocks to Watch:

MongoDB (MDB)

Rolling One-Year Beta: 1.75

Named after "humongous database," reflecting its ability to handle massive data loads, MongoDB (NASDAQ:MDB) provides a flexible document-based database platform that helps developers build, deploy, and maintain modern applications more efficiently.

Why Are We Positive On MDB?

1. ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
2. Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
3. Free cash flow margin is forecasted to grow by 1.7 percentage points in the coming year, potentially giving the company more chips to play with

MongoDB’s stock price of $439.50 implies a valuation ratio of 12.8x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .

Pure Storage (PSTG)

Rolling One-Year Beta: 2.04

Founded in 2009 as a pioneer in enterprise all-flash storage technology, Pure Storage (NYSE:PSTG) provides all-flash data storage hardware and software that helps organizations manage their data more efficiently across on-premises and cloud environments.

Why Is PSTG a Good Business?

1. Offerings are pivotal for their customers' operations as its ARR has averaged 21.2% growth over the past two years
2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 44.3% over the last five years outstripped its revenue performance
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety

At $68.75 per share, Pure Storage trades at 31.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.

Stocks We Like Even More

Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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 Kadant (+351% five-year return). Find your next big winner with StockStory today.