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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.

At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. That said, here are three volatile stocks best left to the gamblers and some better opportunities instead.

Nextdoor (KIND)

Rolling One-Year Beta: 1.37

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 Cautious About KIND?

1. Focus on expanding its platform has led to weaker growth in its average revenue per user

2. Persistent EBITDA losses suggest the business manages its expenses poorly

3. Cash-burning history makes us doubt the long-term viability of its business model

Nextdoor is trading at $1.36 per share, or 2.5x forward price-to-gross profit. To fully understand why you should be careful with KIND, check out our full research report (it’s free).

Manhattan Associates (MANH)

Rolling One-Year Beta: 1.41

Boasting major consumer staples and pharmaceutical companies as clients, Manhattan Associates (NASDAQ:MANH) offers a software-as-service platform that helps customers manage their supply chains.

Why Do We Pass on MANH?

1. Offerings struggled to generate meaningful interest as its average billings growth of 3.6% over the last year did not impress

2. Estimated sales growth of 1.9% for the next 12 months implies demand will slow from its three-year trend

3. Gross margin of 55.6% reflects its high servicing costs

Manhattan Associates’s stock price of $196 implies a valuation ratio of 11.3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than MANH.

THOR Industries (THO)

Rolling One-Year Beta: 1.34

Created through the acquisition and merger of various RV manufacturers, THOR Industries manufactures and sells a range of recreational vehicles, including motorhomes and travel trailers, catering to consumers seeking the freedom and comfort of the RV lifestyle.

Why Should You Dump THO?

1. Annual sales declines of 17.4% for the past two years show its products and services struggled to connect with the market during this cycle

2. Earnings per share have contracted by 3.5% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance

3. Eroding returns on capital suggest its historical profit centers are aging

At $80.75 per share, THOR Industries trades at 14.1x forward P/E. To fully understand why you should be careful with THO, check out our full research report (it’s free).