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. Keeping that in mind, here are three overhyped stocks that may correct and some you should consider instead.
Advanced Energy (AEIS)
One-Month Return: +34.6%
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 Think Twice About AEIS?
- Muted 4.2% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Earnings per share lagged its peers over the last five years as they only grew by 4.1% annually
- Eroding returns on capital suggest its historical profit centers are aging
Advanced Energy’s stock price of $314.76 implies a valuation ratio of 35.9x forward P/E. Check out our free in-depth research report to learn more about why AEIS doesn’t pass our bar.
Lumen (LUMN)
One-Month Return: -2.1%
With approximately 350,000 route miles of fiber optic cable spanning North America and the Asia Pacific, Lumen Technologies (NYSE:LUMN) operates a vast fiber optic network that provides communications, cloud connectivity, security, and IT solutions to businesses and consumers.
Why Do We Steer Clear of LUMN?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 9.7% annually over the last five years
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
- Free cash flow margin shrank by 10.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
At $7.98 per share, Lumen trades at 7.6x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including LUMN in your portfolio.
ManpowerGroup (MAN)
One-Month Return: -1.3%
Founded during the post-World War II economic boom when businesses needed temporary workers, ManpowerGroup (NYSE:MAN) connects millions of people to employment opportunities through its global network of staffing, recruitment, and workforce management services.
Why Is MAN Risky?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Sales over the last five years were less profitable as its earnings per share fell by 21.9% annually while its revenue was flat
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
ManpowerGroup is trading at $29.22 per share, or 8.3x forward P/E. Dive into our free research report to see why there are better opportunities than MAN.
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 9 Market-Beating Stocks. 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 Kadant (+351% five-year return). Find your next big winner with StockStory today.
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