A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south. While some investors embrace risk, mistakes can be costly for those who aren’t prepared.
These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. Keeping that in mind, here is one volatile stock that could deliver huge gains and two that might not be worth the risk.
Two Stocks to Sell:
RH (RH)
Rolling One-Year Beta: 2.94
Formerly known as Restoration Hardware, RH (NYSE: RH) is a specialty retailer that exclusively sells its own brand of high-end furniture and home decor.
Why Does RH Give Us Pause?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Earnings per share have contracted by 38.3% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
- 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
RH’s stock price of $182.26 implies a valuation ratio of 19.5x forward P/E. Read our free research report to see why you should think twice about including RH in your portfolio.
Oshkosh (OSK)
Rolling One-Year Beta: 1.34
Oshkosh (NYSE: OSK) manufactures specialty vehicles for the defense, fire, emergency, and commercial industry, operating various brand subsidiaries within each industry.
Why Does OSK Worry Us?
- Sales pipeline suggests its future revenue growth won’t meet our standards as its backlog averaged 2% declines over the past two years
- Gross margin of 16.5% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7 percentage points
Oshkosh is trading at $131.06 per share, or 11.3x forward P/E. Check out our free in-depth research report to learn more about why OSK doesn’t pass our bar.
One Stock to Watch:
Dynatrace (DT)
Rolling One-Year Beta: 1.36
With its platform processing over 30 trillion pieces of IT performance data daily, Dynatrace (NYSE: DT) provides an AI-powered platform that helps organizations monitor, secure, and optimize their applications and IT infrastructure across cloud environments.
Why Are We Positive On DT?
- Annual revenue growth of 19.5% over the past two years was outstanding, reflecting market share gains
- Superior software functionality and low servicing costs lead to a stellar gross margin of 81.8%
- Robust free cash flow margin of 25.5% gives it many options for capital deployment
At $44.23 per share, Dynatrace trades at 6.4x forward price-to-sales. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged 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 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.
