3 Volatile Stocks We're Skeptical Of

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 best left to the gamblers and some better opportunities instead.

Cars.com (CARS)

Rolling One-Year Beta: 1.33

Originally started as a joint venture between several media companies including The Washington Post and The New York Times, Cars.com (NYSE:CARS) is a digital marketplace that connects new and used car buyers and sellers.

Why Does CARS Give Us Pause?

1. Likely needs to improve its platform or increase its marketing budget for penetration to accelerate as its dealer customers were flat over the last two years
2. Anticipated sales growth of 2.5% for the next year implies demand will be shaky
3. Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term

Cars.com is trading at $11.28 per share, or 5x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than CARS.

Portillo's (PTLO)

Rolling One-Year Beta: 1.07

Begun as a Chicago hot dog stand in 1963, Portillo’s (NASDAQ:PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes.

Why Do We Avoid PTLO?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Investment activity picked up over the last year, pressuring its weak free cash flow margin of -0.9%
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

Portillo’s stock price of $5.65 implies a valuation ratio of 29.7x forward P/E. If you’re considering PTLO for your portfolio, see our FREE research report to learn more.

Resideo (REZI)

Rolling One-Year Beta: 1.54

Resideo Technologies, Inc. (NYSE: REZI) is a manufacturer and distributor of technology-driven products and solutions for home comfort, energy management, water management, and safety and security.

Why Is REZI Not Exciting?

1. Estimated sales growth of 2.9% for the next 12 months implies demand will slow from its two-year trend
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 22.8 percentage points
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $36.13 per share, Resideo trades at 13.3x forward P/E. To fully understand why you should be careful with REZI, check out our full research report (it’s free).

Stocks We Like More

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.