Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. All that said, here are three stocks that are likely overheated and some you should look into instead.
iHeartMedia (IHRT)
One-Month Return: +30.5%
Occasionally featuring celebrity hosts like Ryan Seacrest on its shows, iHeartMedia (NASDAQ: IHRT) is a leading multimedia company renowned for its extensive network of radio stations, digital platforms, and live events across the globe.
Why Should You Dump IHRT?
- Muted 6.5% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
iHeartMedia’s stock price of $5.08 implies a valuation ratio of 0.2x forward price-to-sales. If you’re considering IHRT for your portfolio, see our FREE research report to learn more.
Array (ARRY)
One-Month Return: +17.2%
Going public in October 2020, Array (NASDAQ: ARRY) is a global manufacturer of ground-mounting tracking systems for utility and distributed generation solar energy projects.
Why Do We Avoid ARRY?
- Sales tumbled by 5.6% annually over the last two years, showing market trends are working against its favor during this cycle
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- High net-debt-to-EBITDA ratio of 5× could force the company to raise capital at unfavorable terms if market conditions deteriorate
At $8.78 per share, Array trades at 10.9x forward P/E. Read our free research report to see why you should think twice about including ARRY in your portfolio.
Lantheus (LNTH)
One-Month Return: +16.6%
Pioneering the "Find, Fight and Follow" approach to disease management, Lantheus Holdings (NASDAQGM:LNTH) develops and commercializes radiopharmaceuticals and other imaging agents that help healthcare professionals detect, diagnose, and treat diseases.
Why Does LNTH Give Us Pause?
- Annual revenue growth of 6.4% over the last two years was below our standards for the healthcare sector
- Projected sales decline of 4.9% for the next 12 months points to a tough demand environment ahead
- Costs have risen faster than its revenue over the last two years, causing its adjusted operating margin to decline by 9.8 percentage points
Lantheus is trading at $96.45 per share, or 4.3x forward price-to-sales. To fully understand why you should be careful with LNTH, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.
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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.
