3 Volatile Stocks with Red Flags

A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south. While some investors embrace risk, mistakes can be costly for those who aren’t prepared.

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 steer clear of and a few better alternatives.

iHeartMedia (IHRT)

Rolling One-Year Beta: 2.39

Occasionally featuring celebrity hosts like Ryan Seacrest on its shows, iHeartMedia (NASDAQ:IHRT) is a leading multimedia company renowned for its extensive network of radio stations, digital platforms, and live events across the globe.

Why Do We Avoid IHRT?

1. Products and services fail to spark excitement with consumers, as seen in its flat sales over the last two years
2. Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 15.9% annually
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

At $0.98 per share, iHeartMedia trades at 0.2x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than IHRT.

Cushman & Wakefield (CWK)

Rolling One-Year Beta: 2.17

With expertise in the commercial real estate sector, Cushman & Wakefield (NYSE:CWK) is a global Chicago-based real estate firm offering a comprehensive range of services to clients.

Why Should You Dump CWK?

1. Sales tumbled by 3.3% annually over the last two years, showing consumer trends are working against its favor
2. Earnings per share fell by 11.1% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

Cushman & Wakefield is trading at $8.19 per share, or 7.1x forward price-to-earnings. To fully understand why you should be careful with CWK, check out our full research report (it’s free).

Marcus & Millichap (MMI)

Rolling One-Year Beta: 1.32

Founded in 1971, Marcus & Millichap (NYSE:MMI) specializes in commercial real estate investment sales, financing, research, and advisory services.

Why Are We Out on MMI?

1. Annual sales declines of 2.9% for the past five years show its products and services struggled to connect with the market
2. Cash-burning history makes us doubt the long-term viability of its business model
3. Eroding returns on capital suggest its historical profit centers are aging

Marcus & Millichap’s stock price of $30.69 implies a valuation ratio of 390.1x forward price-to-earnings. Check out our free in-depth research report to learn more about why MMI doesn’t pass our bar.

Stocks We Like More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

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Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.