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.
ZoomInfo (ZI)
One-Month Return: +18%
Founded in 2007 as DiscoveryOrg and renamed after a merger in 2019, ZoomInfo (NASDAQ:ZI) is a software as a service product that provides sales departments with access to a database of prospective clients.
Why Should You Dump ZI?
- Flat billings over the last year suggest it may need to improve its products, pricing, or go-to-market strategy to reinvigorate demand
- Drawn-out sales process reflects its software’s integration hurdles with enterprise clients, restraining customer growth potential
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 10.3 percentage points
At $10.28 per share, ZoomInfo trades at 2.9x forward price-to-sales. Dive into our free research report to see why there are better opportunities than ZI.
Wayfair (W)
One-Month Return: +17.6%
Founded in 2002 by Niraj Shah, Wayfair (NYSE:W) is a leading online retailer of mass-market home goods in the US, UK, Canada, and Germany.
Why Is W Risky?
- Intense competition is diverting traffic from its platform as its active customers fell by 2.1% annually
- Gross margin of 30.5% is below its competitors, leaving less money to invest in areas like marketing and R&D
- 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
Wayfair is trading at $36.49 per share, or 9.2x forward EV/EBITDA. Read our free research report to see why you should think twice about including W in your portfolio.
Kyndryl (KD)
One-Month Return: +18.6%
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 Do We Think Twice About KD?
- Annual sales declines of 6% for the past four years show its products and services struggled to connect with the market during this cycle
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 0.3% for the last five years
- Negative returns on capital show management lost money while trying to expand the business
Kyndryl’s stock price of $38 implies a valuation ratio of 18.8x forward P/E. If you’re considering KD for your portfolio, see our FREE research report to learn more.
Stocks We Like More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. 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.