The stocks in this article are all trading near their 52-week highs. This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.
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 that are likely overheated and some you should look into instead.
Fortrea (FTRE)
One-Month Return: +11.2%
Spun off from Labcorp in 2023 to focus exclusively on clinical research services, Fortrea (NASDAQ: FTRE) is a contract research organization that helps pharmaceutical, biotech, and medical device companies develop and bring their products to market through clinical trials and support services.
Why Are We Out on FTRE?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3.1% annually over the last four years
- Negative returns on capital show management lost money while trying to expand the business, and its shrinking returns suggest its past profit sources are losing steam
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Fortrea’s stock price of $17.52 implies a valuation ratio of 21.3x forward P/E. Check out our free in-depth research report to learn more about why FTRE doesn’t pass our bar.
Jazz Pharmaceuticals (JAZZ)
One-Month Return: +2.1%
Originally founded in 2003 and now headquartered in Ireland following a 2012 tax inversion merger, Jazz Pharmaceuticals (NASDAQGS:JAZZ) develops and markets medicines for sleep disorders, epilepsy, and cancer, with a focus on treatments for patients with limited therapeutic options.
Why Are We Cautious About JAZZ?
- 7.5% annual revenue growth over the last two years was slower than its healthcare peers
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 21.5 percentage points
- Issuance of new shares over the last five years caused its earnings per share to fall by 4.2% annually while its revenue grew
At $237.57 per share, Jazz Pharmaceuticals trades at 9.3x forward P/E. If you’re considering JAZZ for your portfolio, see our FREE research report to learn more.
Citizens Financial Group (CFG)
One-Month Return: +16.2%
Tracing its roots back to 1828 as a community-focused institution, Citizens Financial Group (NYSE: CFG) is a regional bank that provides retail and commercial banking services to individuals, small businesses, and large corporations across 14 states.
Why Does CFG Fall Short?
- Muted 2.6% annual revenue growth over the last two years shows its demand lagged behind its banking peers
- Annual net interest income growth of 5.8% over the last five years was below our standards for the banking sector
- Annual earnings per share growth of 2.5% underperformed its revenue over the last five years, showing its incremental sales were less profitable
Citizens Financial Group is trading at $70.65 per share, or 1.2x forward P/B. Read our free research report to see why you should think twice about including CFG in your portfolio.
High-Quality Stocks for All Market Conditions
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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.
