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.
These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. Keeping that in mind, here is one volatile stock with massive upside potential and two that might not be worth the risk.
Two Stocks to Sell:
Power Integrations (POWI)
Rolling One-Year Beta: 1.43
A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ:POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.
Why Is POWI Risky?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 15.7 percentage points
- Sales over the last five years were less profitable as its earnings per share fell by 2.1% annually while its revenue was flat
Power Integrations’s stock price of $46.51 implies a valuation ratio of 25.8x forward P/E. Check out our free in-depth research report to learn more about why POWI doesn’t pass our bar.
U.S. Physical Therapy (USPH)
Rolling One-Year Beta: 1.22
With a nationwide footprint spanning 671 clinics across 42 states, U.S. Physical Therapy (NYSE:USPH) operates a network of outpatient physical therapy clinics and provides industrial injury prevention services to employers across the United States.
Why Do We Think Twice About USPH?
- Revenue base of $729.6 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Free cash flow margin dropped by 9 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Waning returns on capital imply its previous profit engines are losing steam
At $84.75 per share, U.S. Physical Therapy trades at 32.6x forward P/E. Read our free research report to see why you should think twice about including USPH in your portfolio.
One Stock to Buy:
WEBTOON (WBTN)
Rolling One-Year Beta: 1.18
Pioneering a vertical-scrolling format optimized for mobile devices, WEBTOON Entertainment (NASDAQ:WBTN) operates a global platform where creators publish serialized web-comics and web-novels that users can read in bite-sized episodes.
Why Are We Bullish on WBTN?
- Solid 7.5% annual revenue growth over the last two years indicates its offering’s solve complex business issues
- Exciting sales outlook for the upcoming 12 months calls for 13.6% growth, an acceleration from its two-year trend
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 79.7% annually, topping its revenue gains
WEBTOON is trading at $14.35 per share, or 46.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our 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).
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-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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