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.
These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. Keeping that in mind, here are three volatile stocks to avoid and some better opportunities instead.
Asana (ASAN)
Rolling One-Year Beta: 1.41
Born from the founders' frustration with the inefficiencies of email-based collaboration at Facebook, Asana (NYSE:ASAN) provides a work management platform that helps organizations track projects, set goals, and manage workflows in a centralized digital workspace.
Why Do We Pass on ASAN?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 9.6% underwhelmed
- Customers have churned over the last year due to the commoditized nature of its software, as reflected in its 95.7% net revenue retention rate
- Drawn-out sales process reflects its software’s integration hurdles with enterprise clients, restraining customer growth potential
At $12.33 per share, Asana trades at 3.4x forward price-to-sales. Read our free research report to see why you should think twice about including ASAN in your portfolio.
CAVA (CAVA)
Rolling One-Year Beta: 1.82
Starting from a single Washington, D.C. location, CAVA (NYSE:CAVA) operates a fast-casual restaurant chain offering customizable Mediterranean-inspired dishes.
Why Are We Cautious About CAVA?
- Operating margin of 4.6% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
- Earnings per share have dipped by 15.6% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Negative returns on capital show that some of its growth strategies have backfired
CAVA’s stock price of $49.30 implies a valuation ratio of 75.8x forward P/E. Dive into our free research report to see why there are better opportunities than CAVA.
Kontoor Brands (KTB)
Rolling One-Year Beta: 1.47
Founded in 2019 after separating from VF Corporation, Kontoor Brands (NYSE:KTB) is a clothing company known for its high-quality denim products.
Why Should You Dump KTB?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Poor free cash flow margin of 13% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Kontoor Brands is trading at $70.31 per share, or 11.7x forward P/E. Check out our free in-depth research report to learn more about why KTB doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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