Growth is a hallmark of all great companies, but the laws of gravity eventually take hold. Those who rode the COVID boom and ensuing tech selloff in 2022 will surely remember that the market’s punishment can be swift and severe when trajectories fall.
Luckily for you, our job at StockStory is to help you avoid short-term fads by pointing you toward high-quality businesses that can generate sustainable long-term growth. That said, here is one growth stock with significant upside potential and two whose momentum may slow.
Two Growth Stocks to Sell:
Mission Produce (AVO)
One-Year Revenue Growth: +29.5%
Founded in 1983 in California, Mission Produce (NASDAQ: AVO) grows, packages, and distributes avocados.
Why Do We Steer Clear of AVO?
- Revenue base of $1.39 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Projected sales decline of 15% for the next 12 months points to a tough demand environment ahead
- Gross margin of 10.9% is below its competitors, leaving less money to invest in areas like marketing and production facilities
Mission Produce is trading at $12.44 per share, or 15.8x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including AVO in your portfolio.
LSI (LYTS)
One-Year Revenue Growth: +17.9%
Enhancing commercial environments, LSI (NASDAQ: LYTS) provides lighting and display solutions for businesses and retailers.
Why Does LYTS Fall Short?
- 4.5% annual revenue growth over the last two years was slower than its industrials peers
- Performance over the past two years was negatively impacted by new share issuances as its earnings per share grew slower than its revenue
- Free cash flow margin dropped by 5.9 percentage points over the last five years, implying the company became more capital intensive as competition picked up
At $18.17 per share, LSI trades at 15.1x forward P/E. Dive into our free research report to see why there are better opportunities than LYTS.
One Growth Stock to Buy:
Monday.com (MNDY)
One-Year Revenue Growth: +32.3%
Founded in 2014 and named after the dreaded first day of the work week, Monday.com (NASDAQ: MNDY) is a software-as-a-service platform that helps organizations plan and track work efficiently.
Why Will MNDY Beat the Market?
- Ability to secure long-term commitments with customers is evident in its 32.4% ARR growth over the last year
- Superior software functionality and low servicing costs are reflected in its best-in-class gross margin of 89.5%
- Robust free cash flow margin of 30.4% gives it many options for capital deployment
Monday.com’s stock price of $247 implies a valuation ratio of 10.3x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2024, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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