The stocks featured in this article have all approached their 52-week highs. When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.

However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. On that note, here are three overhyped stocks that may correct and some you should consider instead.

PagerDuty (PD)

One-Month Return: +8.8%

Born from the frustration of developers being woken up by unprioritized alerts, PagerDuty (NYSE: PD) is a digital operations management platform that helps organizations detect and respond to IT incidents, outages, and other critical issues in real-time.

Why Do We Pass on PD?

1. Customers had second thoughts about committing to its platform over the last year as its average billings growth of 1.1% underwhelmed
2. Estimated sales growth of 1.1% for the next 12 months implies demand will slow from its two-year trend
3. Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 3.8 percentage points

At $16.15 per share, PagerDuty trades at 2.5x forward price-to-sales. Check out our free in-depth research report to learn more about why PD doesn’t pass our bar.

Lindblad Expeditions (LIND)

One-Month Return: +37.8%

Founded by explorer Sven-Olof Lindblad in 1979, Lindblad Expeditions (NASDAQ: LIND) offers cruising experiences to remote destinations in partnership with National Geographic.

Why Do We Steer Clear of LIND?

1. Annual revenue growth of 18.5% over the last two years was below our standards for the consumer discretionary sector
2. Operating margin of 6.9% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
3. Projected 5 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position

Lindblad Expeditions is trading at $35.84 per share, or 123.4x forward P/E. Read our free research report to see why you should think twice about including LIND in your portfolio.

American Financial Group (AFG)

One-Month Return: -1.8%

With roots dating back to 1872 and a business model that empowers local decision-making, American Financial Group (NYSE: AFG) is an insurance holding company that specializes in commercial property and casualty insurance products for businesses through its Great American Insurance Group.

Why Do We Think AFG Will Underperform?

1. 3% annualized net premiums earned growth over the last two years lagged behind its insurance peers
2. Earnings per share lagged its peers over the last two years as they only grew by 4.7% annually
3. Policy losses and capital returns have eroded its book value per share this cycle as its book value per share declined by 2.5% annually over the last five years

American Financial Group’s stock price of $141.11 implies a valuation ratio of 2.3x forward P/B. To fully understand why you should be careful with AFG, check out our full research report (it’s free).

Stocks We Like More

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.