The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.

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.

Bandwidth (BAND)

One-Month Return: +55.6%

Powering communications for tech giants like Microsoft, Google, and Zoom, Bandwidth (NASDAQ: BAND) provides cloud-based communications software and APIs that enable businesses to embed voice, messaging, and emergency services into their applications and platforms.

Why Should You Sell BAND?

1. Annual revenue growth of 11.5% over the last two years was below our standards for the software sector
2. Gross margin of 38.2% is way below its competitors, leaving less money to invest in areas like marketing and R&D
3. Static operating margin over the last year shows it couldn’t become more efficient

Bandwidth is trading at $73.66 per share, or 2.4x forward price-to-sales. Read our free research report to see why you should think twice about including BAND in your portfolio.

NN (NNBR)

One-Month Return: +25.1%

Formerly known as Nuturn, NN (NASDAQ: NNBR) provides metal components, bearings, and plastic and rubber components to the automotive, aerospace, medical, and industrial sectors.

Why Is NNBR Risky?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
2. Cash-burning history makes us doubt the long-term viability of its business model
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

At $3.09 per share, NN trades at 30.9x forward P/E. If you’re considering NNBR for your portfolio, see our FREE research report to learn more.

American Airlines (AAL)

One-Month Return: +7.3%

One of the ‘Big Four’ airlines in the US, American Airlines (NASDAQ: AAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.

Why Do We Think AAL Will Underperform?

1. Performance surrounding its revenue passenger miles has lagged its peers
2. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
3. 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

American Airlines’s stock price of $13.28 implies a valuation ratio of 7.3x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why AAL doesn’t pass our bar.

Stocks We Like More

ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.

Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.

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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.