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.
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 with massive upside potential and two that could just as easily collapse.
Two Stocks to Sell:
Zumiez (ZUMZ)
Rolling One-Year Beta: 1.10
With store associates called “Zumiez Stash Members”, Zumiez (NASDAQ: ZUMZ) is a specialty retailer of street and skate apparel, footwear, and accessories.
Why Do We Pass on ZUMZ?
- Recent store closures reflect a shift toward streamlining existing locations to maximize efficiency
- Suboptimal cost structure is highlighted by its history of operating margin losses
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
Zumiez’s stock price of $29.18 implies a valuation ratio of 32.4x forward P/E. Check out our free in-depth research report to learn more about why ZUMZ doesn’t pass our bar.
European Wax Center (EWCZ)
Rolling One-Year Beta: 2.67
Founded by two siblings, European Wax Center (NASDAQ: EWCZ) is a beauty and waxing salon chain specializing in professional wax services and skincare products.
Why Do We Steer Clear of EWCZ?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Earnings growth over the last four years fell short of the peer group average as its EPS only increased by 4% annually
- Returns on capital are growing as management invests in more worthwhile ventures
At $3.72 per share, European Wax Center trades at 6x forward P/E. To fully understand why you should be careful with EWCZ, check out our full research report (it’s free for active Edge members).
One Stock to Watch:
Grid Dynamics (GDYN)
Rolling One-Year Beta: 1.53
With engineering centers across the Americas, Europe, and India serving Fortune 1000 companies, Grid Dynamics (NASDAQ: GDYN) provides technology consulting, engineering, and analytics services to help large enterprises modernize their technology systems and business processes.
Why Does GDYN Stand Out?
- Impressive 29.1% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Earnings per share have massively outperformed its peers over the last five years, increasing by 22.2% annually
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
Grid Dynamics is trading at $9.75 per share, or 22.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 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 Exlservice (+354% 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.
