3 Volatile Stocks Facing Headwinds

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.

Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. That said, here are three volatile stocks best left to the gamblers and some better opportunities instead.

Lattice Semiconductor (LSCC)

Rolling One-Year Beta: 2.51

A global leader in its category, Lattice Semiconductor (NASDAQ:LSCC) is a semiconductor designer specializing in customer-programmable chips that enhance CPU performance for intensive tasks such as machine learning.

Why Are We Wary of LSCC?

1. Sales tumbled by 16.1% annually over the last two years, showing market trends are working against its favor during this cycle
2. Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 9.7 percentage points
3. Earnings growth underperformed the sector average over the last five years as its EPS grew by just 5.6% annually

Lattice Semiconductor’s stock price of $46.44 implies a valuation ratio of 39x forward P/E. Dive into our free research report to see why there are better opportunities than LSCC.

Fastly (FSLY)

Rolling One-Year Beta: 1.94

Founded in 2011, Fastly (NYSE:FSLY) provides content delivery and edge cloud computing services, enabling enterprises and developers to deliver fast, secure, and scalable digital content and experiences.

Why Should You Sell FSLY?

1. Annual revenue growth of 14.3% over the last three years was below our standards for the software sector
2. Gross margin of 54% reflects its high servicing costs
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

At $7.33 per share, Fastly trades at 1.8x forward price-to-sales. If you’re considering FSLY for your portfolio, see our FREE research report to learn more.

First Advantage (FA)

Rolling One-Year Beta: 1.10

Processing approximately 100 million background checks annually across more than 200 countries and territories, First Advantage (NASDAQ:FA) provides employment background screening, identity verification, and compliance solutions to help companies manage hiring risks.

Why Does FA Give Us Pause?

1. Earnings per share have contracted by 8.2% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
2. Investments to defend its competitive moat have ramped up over the last five years as its free cash flow margin decreased by 17.1 percentage points
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

First Advantage is trading at $17.03 per share, or 17.8x forward P/E. Read our free research report to see why you should think twice about including FA in your portfolio.

Stocks We Like More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking 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 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free.