3 Dawdling Stocks Facing Headwinds

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

Choosing the wrong investments can cause you to fall behind, which is why we started StockStory - to separate the winners from the losers. That said, here are three low-volatility stocks to avoid and some better opportunities instead.

Red Robin (RRGB)

Rolling One-Year Beta: 0.58

Known for its bottomless steak fries, Red Robin (NASDAQ:RRGB) is a chain of casual restaurants specializing in burgers and general American fare.

Why Do We Avoid RRGB?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
2. Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
3. High net-debt-to-EBITDA ratio of 14× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Red Robin is trading at $2.79 per share, or 0.9x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why RRGB doesn’t pass our bar.

Flowers Foods (FLO)

Rolling One-Year Beta: -0.08

With Wonder Bread as its premier brand, Flower Foods (NYSE:FLO) is a packaged foods company that focuses on bakery products such as breads, buns, and cakes.

Why Are We Cautious About FLO?

1. Falling unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
2. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
3. Earnings growth underperformed the sector average over the last three years as its EPS grew by just 1.2% annually

Flowers Foods’s stock price of $17.85 implies a valuation ratio of 13.6x forward price-to-earnings. If you’re considering FLO for your portfolio, see our FREE research report to learn more.

LKQ (LKQ)

Rolling One-Year Beta: 0.22

A global distributor of vehicle parts and accessories, LKQ (NASDAQ:LKQ) offers its customers a comprehensive selection of high-quality, affordably priced automobile products.

Why Do We Pass on LKQ?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Estimated sales growth of 2% for the next 12 months implies demand will slow from its two-year trend
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

At $37.30 per share, LKQ trades at 10.2x forward price-to-earnings. To fully understand why you should be careful with LKQ, check out our full research report (it’s free).

Stocks We Like More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.