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.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. All that said, here are three stocks that are likely overheated and some you should look into instead.
Salesforce (CRM)
One-Month Return: +23.7%
With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce (NYSE:CRM) provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.
Why Are We Wary of CRM?
- Offerings struggled to generate meaningful interest as its average billings growth of 11.2% over the last year did not impress
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 10.3%
- Operating margin was unchanged over the last year, suggesting it failed to gain leverage on its fixed costs
At $244.36 per share, Salesforce trades at 4.2x forward price-to-sales. Check out our free in-depth research report to learn more about why CRM doesn’t pass our bar.
Hain Celestial (HAIN)
One-Month Return: +11.8%
Sold in over 75 countries around the world, Hain Celestial (NASDAQ:HAIN) is a natural and organic food company whose products range from snacks to teas to baby food.
Why Is HAIN Risky?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Earnings per share decreased by more than its revenue over the last three years, showing each sale was less profitable
- High net-debt-to-EBITDA ratio of 6× could force the company to raise capital on unfavorable terms if market conditions deteriorate
Hain Celestial’s stock price of $0.66 implies a valuation ratio of 12.3x forward P/E. To fully understand why you should be careful with HAIN, check out our full research report (it’s free).
Strategy (MSTR)
One-Month Return: +36.8%
Once a traditional business intelligence software provider, Strategy (NASDAQ:MSTR) develops AI-powered enterprise analytics software while also functioning as a major corporate holder of Bitcoin cryptocurrency.
Why Do We Think MSTR Will Underperform?
- MicroStrategy’s core analytics software has been eclipsed by its all-in Bitcoin strategy, leaving product innovation and enterprise deals starved for attention
- The company’s debt-financed Bitcoin buying ties shareholder fortunes to crypto swings and interest rates, amplifying downside risk and uncertainty
- On the bright side, its vast Bitcoin treasury gives Executive Chairman Michael Saylor a unique springboard to capture crypto upside and court investors seeking leveraged exposure to digital assets
Strategy is trading at $133.15 per share, or 95.5x forward price-to-sales. If you’re considering MSTR for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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 meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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 Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.