3 Hyped Up Stocks Skating on Thin Ice

Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.

But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. Keeping that in mind, here are three stocks getting more buzz than they deserve and some you should buy instead.

Red Robin (RRGB)

One-Month Return: +77.7%

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

Why Are We Out on RRGB?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants
2. Performance over the past six years shows each sale was less profitable, as its earnings per share fell by 25.5% annually
3. 10× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

At $5.35 per share, Red Robin trades at 1.5x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than RRGB.

Myriad Genetics (MYGN)

One-Month Return: +29.7%

Founded in 1991 as one of the pioneers in translating genetic discoveries into clinical applications, Myriad Genetics (NASDAQ:MYGN) develops genetic tests that assess disease risk, guide treatment decisions, and provide insights across oncology, women's health, and mental health.

Why Should You Sell MYGN?

1. 1.8% annual revenue growth over the last five years was slower than its healthcare peers
2. Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 28.9% annually
3. Push for growth has led to negative returns on capital, signaling value destruction, and its falling returns suggest its earlier profit pools are drying up

Myriad Genetics is trading at $5.33 per share, or 40.8x forward P/E. Read our free research report to see why you should think twice about including MYGN in your portfolio.

Organon (OGN)

One-Month Return: +19.3%

Spun off from Merck in 2021 to create a company dedicated to addressing unmet needs in women's health, Organon (NYSE:OGN) is a global healthcare company focused on improving women's health through prescription therapies, medical devices, biosimilars, and established medicines.

Why Do We Avoid OGN?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 3.8% annually over the last five years
2. Falling earnings per share over the last four years has some investors worried as stock prices ultimately follow EPS over the long term
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 28.9 percentage points

Organon’s stock price of $10.07 implies a valuation ratio of 2.6x forward P/E. Check out our free in-depth research report to learn more about why OGN doesn’t pass our bar.

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 Strong Momentum Stocks for this week. 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.