Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. On that note, here are three stocks getting more buzz than they deserve and some you should buy instead.
Health Catalyst (HCAT)
One-Month Return: +17%
Built on its "Health Catalyst Flywheel" methodology that emphasizes measurable outcomes, Health Catalyst (NASDAQ: HCAT) provides data and analytics technology and services that help healthcare organizations manage their data and drive measurable clinical, financial, and operational improvements.
Why Do We Pass on HCAT?
- Customers had second thoughts about committing to its platform over the last year as its billings plateaued
- Bad unit economics and steep infrastructure costs are reflected in its gross margin of 50.4%, one of the worst among software companies
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
Health Catalyst’s stock price of $1.31 implies a valuation ratio of 0.4x forward price-to-sales. To fully understand why you should be careful with HCAT, check out our full research report (it’s free).
Enphase (ENPH)
One-Month Return: +32.3%
The first company to successfully commercialize the solar micro-inverter, Enphase (NASDAQ: ENPH) manufactures software-driven home energy products.
Why Should You Sell ENPH?
- Sales tumbled by 12.5% annually over the last two years, showing market trends are working against its favor during this cycle
- Free cash flow margin dropped by 10.9 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Diminishing returns on capital suggest its earlier profit pools are drying up
Enphase is trading at $42.34 per share, or 18.4x forward P/E. Dive into our free research report to see why there are better opportunities than ENPH.
World Kinect (WKC)
One-Month Return: +17.4%
Serving over 150,000 customers from commercial jets to cargo ships to heating oil consumers, World Kinect (NYSE: WKC) procures and delivers fuel and energy products to airlines, shipping companies, trucking fleets, and industrial businesses worldwide.
Why Should You Dump WKC?
- Costly operations and weak unit economics result in an inferior gross margin of 2.3% that must be offset through higher production volumes
- 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
At $27.38 per share, World Kinect trades at 0x forward price-to-sales. To fully understand why you should be careful with WKC, check out our full research report (it’s free).
Stocks We Like More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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.
