Volatility cuts both ways - while it creates opportunities, it also increases risk, making sharp declines just as likely as big gains. This unpredictability can shake out even the most experienced investors.
At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. Keeping that in mind, here are three volatile stocks to avoid and some better opportunities instead.
ZoomInfo (GTM)
Rolling One-Year Beta: 1.92
Operating a platform it calls "RevOS" - short for Revenue Operating System - ZoomInfo (NASDAQ: GTM) provides sales, marketing, and recruiting teams with business intelligence and analytics to identify prospects and deliver targeted outreach.
Why Do We Avoid GTM?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 2.3% underwhelmed
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
ZoomInfo’s stock price of $10.81 implies a valuation ratio of 2.9x forward price-to-sales. If you’re considering GTM for your portfolio, see our FREE research report to learn more.
8x8 (EGHT)
Rolling One-Year Beta: 2.04
Named after its founding year (1987) with "8x8" representing binary code for communications, 8x8 (NASDAQ: EGHT) provides cloud-based contact center and unified communications solutions that enable businesses to manage customer interactions and internal communications through a single platform.
Why Do We Steer Clear of EGHT?
- Products, pricing, or go-to-market strategy may need some adjustments as its 1.2% average billings growth over the last year was weak
- Estimated sales for the next 12 months are flat and imply a softer demand environment
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
At $1.86 per share, 8x8 trades at 0.4x forward price-to-sales. Dive into our free research report to see why there are better opportunities than EGHT.
Sweetgreen (SG)
Rolling One-Year Beta: 1.57
Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE: SG) is a casual quick service chain known for its healthy salads and bowls.
Why Does SG Give Us Pause?
- Persistent operating margin losses suggest the business manages its expenses poorly
- 7.3 percentage point decline in its free cash flow margin over the last year reflects the company’s increased investments to defend its market position
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Sweetgreen is trading at $6.70 per share, or 35.1x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why SG doesn’t pass our bar.
Stocks We Like More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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-small-cap company Comfort Systems (+782% 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
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