A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south. While some investors embrace risk, mistakes can be costly for those who aren’t prepared.

These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. That said, here are three volatile stocks to avoid and some better opportunities instead.

Advanced Energy (AEIS)

Rolling One-Year Beta: 1.92

Pioneering technologies for radio frequency power delivery, Advanced Energy (NASDAQ:AEIS) provides power supplies, thermal management systems, and measurement and control instruments for various manufacturing processes.

Why Do We Steer Clear of AEIS?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 10.4% annually over the last two years

2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6.7 percentage points

3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $92.99 per share, Advanced Energy trades at 18.4x forward price-to-earnings. Check out our free in-depth research report to learn more about why AEIS doesn’t pass our bar .

TaskUs (TASK)

Rolling One-Year Beta: 2.28

Starting as a virtual assistant service in 2008 before evolving into a global digital services provider, TaskUs (NASDAQ:TASK) provides outsourced digital services including customer experience management, content moderation, and AI data services to innovative technology companies.

Why Does TASK Fall Short?

1. 1.8% annual revenue growth over the last two years was slower than its business services peers

2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

3. Underwhelming 5.4% return on capital reflects management’s difficulties in finding profitable growth opportunities

TaskUs’s stock price of $13.05 implies a valuation ratio of 9.4x forward price-to-earnings. If you’re considering TASK for your portfolio, see our FREE research report to learn more .

Ziff Davis (ZD)

Rolling One-Year Beta: 1.99

Originally a pioneering technology publisher founded in 1927 that became famous for PC Magazine, Ziff Davis (NASDAQ:ZD) operates a portfolio of digital media brands and subscription services across technology, shopping, gaming, healthcare, and cybersecurity markets.

Why Is ZD Risky?

1. Sales stagnated over the last two years and signal the need for new growth strategies

2. 8.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned