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 steer clear of and a few better alternatives.
Qualys (QLYS)
Rolling One-Year Beta: 1.33
Originally developed to address the growing complexity of IT security in the cloud era, Qualys (NASDAQ: QLYS) provides a cloud-based platform that helps organizations identify, manage, and protect their IT assets from cyber threats across on-premises, cloud, and mobile environments.
Why Does QLYS Worry Us?
- Customers were hesitant to make long-term commitments to its software as its 10.1% average ARR growth over the last year was sluggish
- Estimated sales growth of 8.1% for the next 12 months implies demand will slow from its two-year trend
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
Qualys is trading at $152.49 per share, or 7.8x forward price-to-sales. If you’re considering QLYS for your portfolio, see our FREE research report to learn more.
MarineMax (HZO)
Rolling One-Year Beta: 1.78
Appropriately headquartered in Clearwater, Florida, MarineMax (NYSE: HZO) sells boats, yachts, and other marine products.
Why Do We Avoid HZO?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
MarineMax’s stock price of $25.20 implies a valuation ratio of 37.7x forward P/E. To fully understand why you should be careful with HZO, check out our full research report (it’s free for active Edge members).
Lincoln Electric (LECO)
Rolling One-Year Beta: 1.12
Headquartered in Ohio, Lincoln Electric (NASDAQ: LECO) manufactures and sells welding equipment for various industries.
Why Are We Wary of LECO?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Earnings per share lagged its peers over the last two years as they only grew by 4.9% annually
- Eroding returns on capital suggest its historical profit centers are aging
At $243.58 per share, Lincoln Electric trades at 23.9x forward P/E. Read our free research report to see why you should think twice about including LECO in your portfolio.
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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
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