Each stock in this article is trading near its 52-week high. These elevated prices usually indicate some degree of investor confidence, business improvements, or favorable market conditions.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. On that note, here are three overhyped stocks that may correct and some you should consider instead.
ON24 (ONTF)
One-Month Return: +37.5%
Powering over 1,700 companies' virtual marketing efforts since 1998, ON24 (NYSE:ONTF) provides a cloud-based platform that enables businesses to create interactive digital experiences and capture actionable data from customer engagement.
Why Do We Pass on ONTF?
- Offerings couldn’t generate interest over the last year as its billings have averaged 8.1% declines
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Poor expense management has led to operating margin losses
ON24 is trading at $7.96 per share, or 2.5x forward price-to-sales. Check out our free in-depth research report to learn more about why ONTF doesn’t pass our bar.
Dine Brands (DIN)
One-Month Return: +10.1%
Operating a franchise model, Dine Brands (NYSE:DIN) is a casual restaurant chain that owns the Applebee’s and IHOP banners.
Why Do We Think DIN Will Underperform?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 6.7 percentage points
- 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Dine Brands’s stock price of $37.82 implies a valuation ratio of 8.3x forward P/E. If you’re considering DIN for your portfolio, see our FREE research report to learn more.
Kirby (KEX)
One-Month Return: +13.5%
Transporting goods along all U.S. coasts, Kirby (NYSE:KEX) provides inland and coastal marine transportation services.
Why Are We Cautious About KEX?
- 4.7% annual revenue growth over the last two years was slower than its industrials peers
- Free cash flow margin dropped by 4 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- ROIC of 3.6% reflects management’s challenges in identifying attractive investment opportunities
At $125.89 per share, Kirby trades at 18.6x forward P/E. Dive into our free research report to see why there are better opportunities than KEX.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.