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Wall Street Journal1 Volatile Stock for Long-Term Investors and 2 That Underwhelm
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.
Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. Keeping that in mind, here is one volatile stock with massive upside potential and two that could just as easily collapse.
Two Stocks to Sell:
Nextdoor (NXDR)
Rolling One-Year Beta: 1.45
Helping residents figure out what's happening on their block in real time, Nextdoor (NYSE:KIND) is a social network that connects neighbors with each other and with local businesses.
Why Are We Wary of NXDR?
- White space opportunities may be dwindling as its growth in weekly active users averaged a weak 6.5%
- Persistent EBITDA margin losses suggest the business manages its expenses poorly
- Negative free cash flow raises questions about the return timeline for its investments
Nextdoor’s stock price of $1.93 implies a valuation ratio of 3.4x forward price-to-gross profit. Check out our free in-depth research report to learn more about why NXDR doesn’t pass our bar.
Lincoln Financial Group (LNC)
Rolling One-Year Beta: 1.14
Founded in 1905 by a group of Fort Wayne, Indiana businessmen who named the company after Abraham Lincoln, Lincoln National Corporation (NYSE:LNC) provides insurance, retirement plans, and wealth management products through its subsidiaries, operating under four main segments: Annuities, Life Insurance, Group Protection, and Retirement Plan Services.
Why Do We Think LNC Will Underperform?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Insurance offerings faced market headwinds this cycle, reflected in stagnant net premiums earned over the last five years
- Products and services are facing significant credit quality challenges during this cycle as book value per share has declined by 14.9% annually over the last five years
At $42.75 per share, Lincoln Financial Group trades at 0.9x forward P/B. If you’re considering LNC for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Super Micro (SMCI)
Rolling One-Year Beta: 2.46
Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ:SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Why Is SMCI a Good Business?
- Annual revenue growth of 68.8% over the last two years was superb and indicates its market share increased during this cycle
- Massive revenue base of $21.05 billion makes it a well-known name that influences purchasing decisions
- Free cash flow flipped to positive over the last five years, showing the company has crossed a key inflection point
Super Micro is trading at $34.67 per share, or 14.7x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum 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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