The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. Keeping that in mind, here are three stocks getting more buzz than they deserve and some you should buy instead.
NXP Semiconductors (NXPI)
One-Month Return: +11.7%
Spun off from Dutch electronics giant Philips in 2006, NXP Semiconductors (NASDAQ: NXPI) is a designer and manufacturer of chips used in autos, industrial manufacturing, mobile devices, and communications infrastructure.
Why Does NXPI Give Us Pause?
- Sales tumbled by 4.4% annually over the last two years, showing market trends are working against its favor during this cycle
- Free cash flow margin shrank by 10.1 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
At $222.87 per share, NXP Semiconductors trades at 17.2x forward P/E. Dive into our free research report to see why there are better opportunities than NXPI.
Deckers (DECK)
One-Month Return: +11.6%
Established in 1973, Deckers (NYSE: DECK) is a footwear and apparel conglomerate with a portfolio of lifestyle and performance brands.
Why Should You Dump DECK?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Poor expense management has led to an operating margin of 23.4% that is below the industry average
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 18.5% for the last two years
Deckers is trading at $102.69 per share, or 15.9x forward P/E. To fully understand why you should be careful with DECK, check out our full research report (it’s free for active Edge members).
Lovesac (LOVE)
One-Month Return: +7.3%
Known for its oversized, premium beanbags, Lovesac (NASDAQ: LOVE) is a specialty furniture brand selling modular furniture.
Why Do We Think LOVE Will Underperform?
- Muted 19.5% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
- Low free cash flow margin of 1.1% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Lovesac’s stock price of $15.23 implies a valuation ratio of 11x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including LOVE in your portfolio.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 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.
