Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.

While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. All that said, here are two stocks with lasting competitive advantages and one that may correct.

One Momentum Stock to Sell:

Elanco (ELAN)

One-Month Return: +34.1%

Originally established as a division of pharmaceutical giant Eli Lilly before becoming independent in 2018, Elanco Animal Health (NYSE: ELAN) develops and sells medications, vaccines, and other health products for pets and farm animals across more than 90 countries.

Why Does ELAN Worry Us?

1. Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
2. Performance over the past five years was negatively impacted by new share issuances as its earnings per share were flat while its revenue grew
3. Negative returns on capital show that some of its growth strategies have backfired

At $12.75 per share, Elanco trades at 15.7x forward P/E. If you’re considering ELAN for your portfolio, see our FREE research report to learn more.

Two Momentum Stocks to Buy:

Zscaler (ZS)

One-Month Return: +15.5%

After successfully selling all four of his previous cybersecurity companies, Jay Chaudhry's fifth venture, Zscaler (NASDAQ: ZS) offers software-as-a-service that helps companies securely connect to applications and networks in the cloud.

Why Is ZS a Good Business?

1. Customers view its software as mission-critical to their operations as its ARR has averaged 26.7% growth over the last year
2. Projected revenue growth of 19.7% for the next 12 months suggests its momentum from the last three years will persist
3. Strong free cash flow margin of 28.7% enables it to reinvest or return capital consistently

Zscaler is trading at $254 per share, or 13.5x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.

DexCom (DXCM)

One-Month Return: +16.9%

Founded in 1999 and receiving its first FDA approval in 2006, DexCom (NASDAQ: DXCM) develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks.

Why Do We Love DXCM?

1. Average organic revenue growth of 19.2% over the past two years demonstrates its ability to expand independently without relying on acquisitions
2. Additional sales over the last five years increased its profitability as the 23.2% annual growth in its earnings per share outpaced its revenue
3. ROIC punches in at 25%, illustrating management’s expertise in identifying profitable investments

DexCom’s stock price of $83.20 implies a valuation ratio of 39.4x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free.