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. That said, here are two volatile stocks that could reward patient investors and one that might not be worth the risk.
One Stock to Sell:
Webster Financial (WBS)
Rolling One-Year Beta: 1.45
Founded during the Great Depression in 1935 and evolving into a major Northeastern financial institution, Webster Financial (NYSE:WBS) is a bank holding company that provides commercial banking, consumer banking, and employee benefits solutions through its Webster Bank and HSA Bank division.
Why Is WBS Not Exciting?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Overall productivity is expected to decrease over the next year as Wall Street thinks its efficiency ratio will degrade by 2.7 percentage points
- Annual interest expenses are high relative to its profits, increasing the probability of its failure to meet certain borrowing obligations
Webster Financial is trading at $57.76 per share, or 1x forward P/B. To fully understand why you should be careful with WBS, check out our full research report (it’s free).
Two Stocks to Watch:
Uber (UBER)
Rolling One-Year Beta: 1.23
Notoriously funded with $7.7 billion from the Softbank Vision Fund, Uber (NYSE:UBER) operates a platform of on-demand services such as ride-hailing, food delivery, and freight.
Why Are We Backing UBER?
- Monthly Active Platform Consumers are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Additional sales over the last three years increased its profitability as the 183% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin expanded by 17.7 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends
At $92.05 per share, Uber trades at 21.7x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
AppLovin (APP)
Rolling One-Year Beta: 3.93
Co-founded by Adam Foroughi, who was frustrated with not being able to find a good solution to market his own dating app, AppLovin (NASDAQ:APP) is both a mobile game studio and provider of marketing and monetization tools for mobile app developers.
Why Do We Watch APP?
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- Disciplined cost controls and effective management resulted in a strong trailing 12-month operating margin of 42.8%, and its operating leverage amplified its profits over the last year
- Strong free cash flow margin of 49.3% enables it to reinvest or return capital consistently
AppLovin’s stock price of $332.97 implies a valuation ratio of 20.5x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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