Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Finding the right balance between safety and returns isn’t easy, which is why StockStory is here to help. That said, here are three low-volatility stocks that don’t make the cut and some better opportunities instead.
Guess (GES)
Rolling One-Year Beta: 0.83
Flexing the iconic upside-down triangle logo with a question mark, Guess (NYSE: GES) is a global fashion brand known for its trendy clothing, accessories, and denim wear.
Why Do We Think GES Will Underperform?
- Lackluster 7.3% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Guess’s stock price of $16.90 implies a valuation ratio of 11.7x forward P/E. Dive into our free research report to see why there are better opportunities than GES.
CooperCompanies (COO)
Rolling One-Year Beta: 0.81
With a history dating back to 1958 and a portfolio spanning two distinct healthcare segments, Cooper Companies (NASDAQ: COO) develops and manufactures medical devices focused on vision care through contact lenses and women's health including fertility products and services.
Why Do We Think Twice About COO?
- Muted 7.3% annual revenue growth over the last two years shows its demand lagged behind its healthcare peers
- Free cash flow margin dropped by 8.3 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
CooperCompanies is trading at $68 per share, or 16x forward P/E. Check out our free in-depth research report to learn more about why COO doesn’t pass our bar.
GoodRx (GDRX)
Rolling One-Year Beta: 0.65
Started in 2011 to tackle the problem of high prescription drug costs in America, GoodRx (NASDAQ: GDRX) operates a digital platform that helps consumers find lower prices on prescription medications through price comparison tools and discount codes.
Why Should You Sell GDRX?
- Customer additions have disappointed over the past two years, indicating the company’s value proposition may not be resonating
- Revenue base of $800.7 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Push for growth has led to negative returns on capital, signaling value destruction
At $3.33 per share, GoodRx trades at 7.7x forward P/E. Read our free research report to see why you should think twice about including GDRX in your portfolio.
Stocks We Like More
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Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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).
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