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3 Volatile Stocks with Warning Signs

WSM Cover Image

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. That said, here are three volatile stocks best left to the gamblers and some better opportunities instead.

Williams-Sonoma (WSM)

Rolling One-Year Beta: 1.48

Started in 1956 as a store specializing in French cookware, Williams-Sonoma (NYSE: WSM) is a specialty retailer of higher-end kitchenware, home goods, and furniture.

Why Is WSM Not Exciting?

  1. Store closures and disappointing same-store sales suggest demand is sluggish and it’s rightsizing its operations
  2. Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
  3. Capital intensity has ramped up over the last year as its free cash flow margin decreased by 5.3 percentage points

Williams-Sonoma’s stock price of $170.39 implies a valuation ratio of 20x forward P/E. Dive into our free research report to see why there are better opportunities than WSM.

Timken (TKR)

Rolling One-Year Beta: 1.11

Established after the founder noticed the difficulty freight wagons had making sharp turns, Timken (NYSE: TKR) is a provider of industrial parts used across various sectors.

Why Do We Avoid TKR?

  1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
  2. Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
  3. Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 8.7% annually, worse than its revenue

Timken is trading at $79.16 per share, or 13.9x forward P/E. To fully understand why you should be careful with TKR, check out our full research report (it’s free).

Myriad Genetics (MYGN)

Rolling One-Year Beta: 1.06

Founded in 1991 as one of the pioneers in translating genetic discoveries into clinical applications, Myriad Genetics (NASDAQ: MYGN) develops genetic tests that assess disease risk, guide treatment decisions, and provide insights across oncology, women's health, and mental health.

Why Do We Pass on MYGN?

  1. Sales trends were unexciting over the last five years as its 1.8% annual growth was below the typical healthcare company
  2. Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 28.9% annually
  3. Push for growth has led to negative returns on capital, signaling value destruction, and its shrinking returns suggest its past profit sources are losing steam

At $4.48 per share, Myriad Genetics trades at 35.1x forward P/E. Check out our free in-depth research report to learn more about why MYGN doesn’t pass our bar.

Stocks We Like More

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Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. 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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