The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
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.
Paylocity (PCTY)
One-Month Return: +15.2%
Operating in a field where companies traditionally juggled multiple disconnected systems, Paylocity (NASDAQ:PCTY) provides cloud-based human capital management and payroll software solutions that help businesses manage their workforce and HR processes.
Why Is PCTY Not Exciting?
- Underwhelming ARR growth of 12.2% over the last year suggests the company faced challenges in acquiring and retaining long-term customers
- Estimated sales growth of 6.9% for the next 12 months implies demand will slow from its two-year trend
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
Paylocity’s stock price of $166.34 implies a valuation ratio of 4.7x forward price-to-sales. Read our free research report to see why you should think twice about including PCTY in your portfolio.
Sweetgreen (SG)
One-Month Return: +33.9%
Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE:SG) is a casual quick service chain known for its healthy salads and bowls.
Why Is SG Risky?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants
- Cash burn has widened over the last year, making us question whether it can reliably generate shareholder value
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Sweetgreen is trading at $10.02 per share, or 1.8x forward price-to-sales. If you’re considering SG for your portfolio, see our FREE research report to learn more.
Bally's (BALY)
One-Month Return: +22.1%
Headquartered in Providence, Rhode Island, Bally's Corporation (NYSE:BALY) is a diversified global casino-entertainment company that owns and manages casinos, resorts, and online gaming platforms.
Why Do We Pass on BALY?
- Lackluster 6.9% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $12.90 per share, Bally's trades at 13.6x forward EV-to-EBITDA. To fully understand why you should be careful with BALY, check out our full research report (it’s free).
Stocks We Like More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.