The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to new product launches, positive news, or even a dedicated social media following.
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.
Skillz (SKLZ)
One-Month Return: +12.9%
Taking a new twist at video gaming, Skillz (NYSE:SKLZ) offers developers a platform to create and distribute mobile games where players can pay fees to compete for cash prizes.
Why Is SKLZ Risky?
- Paying Monthly Active Users have declined by 33.6% annually over the last two years, suggesting it may need to revamp its features or user experience to stay competitive
- Poor expense management has led to EBITDA margin losses
- Cash-burning history makes us doubt the long-term viability of its business model
Skillz’s stock price of $6.30 implies a valuation ratio of 1.3x forward price-to-gross profit. Dive into our free research report to see why there are better opportunities than SKLZ.
Warner Bros. Discovery (WBD)
One-Month Return: +8.3%
Formed from the merger of WarnerMedia and Discovery, Warner Bros. Discovery (NASDAQ:WBD) is a multinational media and entertainment company, offering television networks, streaming services, and film and television production.
Why Do We Pass on WBD?
- Annual sales declines of 4.9% for the past two years show its products and services struggled to connect with the market
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 55.1% annually
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
At $9.82 per share, Warner Bros. Discovery trades at 178.5x forward P/E. If you’re considering WBD for your portfolio, see our FREE research report to learn more.
Kyndryl (KD)
One-Month Return: +8.7%
Born from IBM's managed infrastructure services business in a 2021 spinoff, Kyndryl (NYSE:KD) is the world's largest IT infrastructure services provider that designs, builds, and manages technology environments for enterprise customers.
Why Is KD Not Exciting?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 6% annually over the last four years
- Poor free cash flow margin of 0.3% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Push for growth has led to negative returns on capital, signaling value destruction
Kyndryl is trading at $40.37 per share, or 19.5x forward P/E. Check out our free in-depth research report to learn more about why KD doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.