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 reward patient investors and two that could just as easily collapse.
Two Stocks to Sell:
Olaplex (OLPX)
Rolling One-Year Beta: 1.45
Rising to fame on TikTok because of its “bond building" hair products, Olaplex (NASDAQ: OLPX) offers products and treatments that repair the damage caused by traditional heat and chemical-based styling goods.
Why Do We Think Twice About OLPX?
- Annual revenue declines of 16.4% over the last three years indicate problems with its market positioning
- Sales were less profitable over the last three years as its earnings per share fell by 49.6% annually, worse than its revenue declines
- Capital intensity has ramped up over the last year as its free cash flow margin decreased by 13.2 percentage points
Olaplex’s stock price of $1.28 implies a valuation ratio of 14.4x forward P/E. Dive into our free research report to see why there are better opportunities than OLPX.
AeroVironment (AVAV)
Rolling One-Year Beta: 1.61
Focused on the future of autonomous military combat, AeroVironment (NASDAQ: AVAV) specializes in advanced unmanned aircraft systems and electric vehicle charging solutions.
Why Does AVAV Give Us Pause?
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 9.4 percentage points
- Free cash flow margin dropped by 25.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Push for growth has led to negative returns on capital, signaling value destruction
At $396.00 per share, AeroVironment trades at 92.4x forward P/E. Read our free research report to see why you should think twice about including AVAV in your portfolio.
One Stock to Buy:
Axon (AXON)
Rolling One-Year Beta: 1.83
Providing body cameras and tasers for first responders, AXON (NASDAQ: AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.
Why Are We Backing AXON?
- Products are reaching more customers as its unit sales averaged 28.8% growth over the past two years
- Additional sales over the last two years increased its profitability as the 46.5% annual growth in its earnings per share outpaced its revenue
- Historical investments are beginning to pay off as its returns on capital are growing
Axon is trading at $714.44 per share, or 107.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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