3 Volatile Stocks with Warning Signs

Market swings can be tough to stomach, and volatile stocks often experience exaggerated moves in both directions. While many thrive during risk-on environments, many also struggle to maintain investor confidence when the ride gets bumpy.

These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. That said, here are three volatile stocks to steer clear of and a few better alternatives.

CarGurus (CARG)

Rolling One-Year Beta: 1.07

Bringing transparency to a sometimes opaque process, CarGurus (NASDAQ:CARG) is a digital marketplace where auto dealers can connect with potential customers and where car buyers can browse, purchase, and obtain financing.

Why Are We Wary of CARG?

1. Modest 2.5% annual growth in paying dealers over the last two years indicates potential challenges in customer acquisition and retention
2. Demand has fallen off a cliff over the last two years as its average revenue per user fell by 8.1% annually while it struggled to expand its customer base
3. Anticipated sales growth of 5.4% for the next year implies demand will be shaky

CarGurus is trading at $27.20 per share, or 8x forward EV/EBITDA. If you’re considering CARG for your portfolio, see our FREE research report to learn more.

United Rentals (URI)

Rolling One-Year Beta: 1.16

Owning the largest rental fleet in the world, United Rentals (NYSE:URI) provides equipment rental and related services to construction, industrial, and infrastructure industries.

Why Are We Cautious About URI?

1. The company has faced growth challenges as its 6% annual revenue increases over the last two years fell short of other industrials companies
2. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 1.6% annually
3. 2.1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

At $869.05 per share, United Rentals trades at 18.6x forward P/E. To fully understand why you should be careful with URI, check out our full research report (it’s free).

Hyster-Yale Materials Handling (HY)

Rolling One-Year Beta: 1.30

Playing a significant role in the development of the hydraulic lift truck, Hyster-Yale (NYSE:HY) designs, manufactures, and sells materials handling equipment to various sectors.

Why Is HY Risky?

1. Sales tumbled by 2% annually over the last two years, showing market trends are working against its favor during this cycle
2. Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
3. Earnings per share fell by 2.6% annually over the last five years while its revenue grew, partly because it diluted shareholders

Hyster-Yale Materials Handling’s stock price of $39.44 implies a valuation ratio of 15.2x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why HY doesn’t pass our bar.

High-Quality Stocks for All Market Conditions

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 Growth Stocks for this month. 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.