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 are three volatile stocks to steer clear of and a few better alternatives.

Health Catalyst (HCAT)

Rolling one-year beta: 2.05

Built on its "Health Catalyst Flywheel" methodology that emphasizes measurable outcomes, Health Catalyst (NASDAQ: HCAT) provides data and analytics technology and services that help healthcare organizations manage their data and drive measurable clinical, financial, and operational improvements.

Why Do We Steer Clear of HCAT?

1. Billings have dropped by 14.4% over the last year, suggesting it might have to lower prices to stimulate growth
2. Gross margin of 51.2% reflects its high servicing costs
3. Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue

Health Catalyst’s stock price of $1.60 implies a valuation ratio of 0.6x forward price-to-sales. Read our free research report to see why you should think twice about including HCAT in your portfolio.

Sweetgreen (SG)

Rolling one-year beta: 2.08

Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE: SG) is a casual quick service chain known for its healthy salads and bowls.

Why Should You Sell SG?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
2. Long-term business health is up for debate as its cash burn has increased over the last year
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

At $10.25 per share, Sweetgreen trades at 1.6x forward price-to-sales. Check out our free in-depth research report to learn more about why SG doesn’t pass our bar.

Energizer (ENR)

Rolling one-year beta: 1.38

Masterminds behind the viral Energizer Bunny mascot, Energizer (NYSE: ENR) is one of the world's largest manufacturers of batteries.

Why Do We Pass on ENR?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
3. High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens

Energizer is trading at $22.74 per share, or 6.8x forward P/E. If you’re considering ENR for your portfolio, see our FREE research report to learn more.

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