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. That said, here is one volatile stock that could deliver huge gains and two that might not be worth the risk.
Two Stocks to Sell:
Stitch Fix (SFIX)
Rolling One-Year Beta: 1.79
One of the original subscription box companies, Stitch Fix (NASDAQ: SFIX) is an online personal styling and fashion service that curates personalized clothing selections for customers.
Why Do We Pass on SFIX?
- Performance surrounding its active clients has lagged its peers
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 0.5% for the last two years
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Stitch Fix’s stock price of $5.28 implies a valuation ratio of 0.5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than SFIX.
Terex (TEX)
Rolling One-Year Beta: 1.54
With humble beginnings as a dump truck company, Terex (NYSE: TEX) today manufactures lifting and material handling equipment designed to move and hoist heavy goods and materials.
Why Are We Cautious About TEX?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Earnings per share fell by 19.3% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
- 3.7 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $60.38 per share, Terex trades at 11.4x forward P/E. If you’re considering TEX for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Limbach (LMB)
Rolling One-Year Beta: 1.17
Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.
Why Are We Positive On LMB?
- Operating margin expansion of 6 percentage points over the last five years shows the company optimized its expenses
- Additional sales over the last two years increased its profitability as the 42.5% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin grew by 8 percentage points over the last five years, giving the company more chips to play with
Limbach is trading at $86.35 per share, or 21x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Check out the high-quality names we’ve flagged in 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
