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.
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 best left to the gamblers and some better opportunities instead.
Kratos (KTOS)
Rolling One-Year Beta: 1.35
Established with a commitment to supporting national security, Kratos (NASDAQ: KTOS) is a provider of advanced engineering, technology, and security solutions tailored for critical national security applications.
Why Is KTOS Not Exciting?
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 9 percentage points
- Underwhelming 3.2% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $71.64 per share, Kratos trades at 107.4x forward P/E. If you’re considering KTOS for your portfolio, see our FREE research report to learn more.
Proto Labs (PRLB)
Rolling One-Year Beta: 1.41
Pioneering the concept of online quoting and manufacturing for custom prototypes and low-volume production parts, Proto Labs (NYSE: PRLB) offers injection molding, 3D printing, and sheet metal fabrication for manufacturers in various industries.
Why Do We Think PRLB Will Underperform?
- Sales trends were unexciting over the last two years as its 2.4% annual growth was below the typical industrials company
- Earnings per share have contracted by 8.7% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- Negative returns on capital show that some of its growth strategies have backfired, and its decreasing returns suggest its historical profit centers are aging
Proto Labs’s stock price of $49.72 implies a valuation ratio of 30.8x forward P/E. Dive into our free research report to see why there are better opportunities than PRLB.
Atlantic Union Bankshares (AUB)
Rolling One-Year Beta: 1.33
Tracing its roots back to 1902 when it first opened its doors in Virginia, Atlantic Union Bankshares (NYSE: AUB) is a full-service regional bank providing commercial and retail banking, wealth management, and insurance services throughout Virginia and parts of Maryland and North Carolina.
Why Are We Cautious About AUB?
- Tangible book value per share was flat over the last five years, indicating it’s failed to build equity value this cycle
- Estimated tangible book value per share growth of 7.3% for the next 12 months is soft and implies weaker profitability
- Tier one capital ratio of 9.8% is insufficient to meet regulatory requirements, increasing the probability of government intervention
Atlantic Union Bankshares is trading at $32.80 per share, or 0.9x forward P/B. Check out our free in-depth research report to learn more about why AUB doesn’t pass our bar.
Stocks We Like 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 6 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
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