Growth is oxygen. But when it evaporates, the consequences can be severe - ask anyone who bought Cisco in the Dot-Com Bubble or newer investors who lived through the 2020 to 2022 COVID cycle.
Deciphering which businesses can sustain their high growth rates is a challenge for even the most seasoned professionals, which is why we started StockStory. Keeping that in mind, here is one growth stock with significant upside potential and two that could be down big.
Two Growth Stocks to Sell:
Zillow (ZG)
One-Year Revenue Growth: +15.2%
Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ: ZG) is the leading U.S. online real estate marketplace.
Why Are We Hesitant About ZG?
- Products and services have few die-hard fans as sales have declined by 6.6% annually over the last five years
- Suboptimal cost structure is highlighted by its history of operating margin losses
- Push for growth has led to negative returns on capital, signaling value destruction, and its shrinking returns suggest its past profit sources are losing steam
Zillow’s stock price of $70.13 implies a valuation ratio of 33.7x forward P/E. Read our free research report to see why you should think twice about including ZG in your portfolio.
Republic Bancorp (RBCAA)
One-Year Revenue Growth: +16.6%
With roots dating back to 1974 and operating across multiple states including Kentucky, Indiana, Florida, Ohio, and Tennessee, Republic Bancorp (NASDAQGS:RBCA.A) is a Kentucky-based financial holding company that operates a bank offering traditional banking, mortgage services, and specialized financial products.
Why Are We Cautious About RBCAA?
- Forecasted net interest income decline of 1.7% for the upcoming 12 months implies demand will fall off a cliff
At $66.41 per share, Republic Bancorp trades at 1.2x forward P/B. To fully understand why you should be careful with RBCAA, check out our full research report (it’s free for active Edge members).
One Growth Stock to Watch:
Hims & Hers Health (HIMS)
One-Year Revenue Growth: +78%
Originally launched with a focus on stigmatized conditions like hair loss and sexual health, Hims & Hers Health (NYSE: HIMS) operates a consumer-focused telehealth platform that connects patients with healthcare providers for prescriptions and wellness products.
Why Does HIMS Catch Our Eye?
- Customer growth averaged 38.9% over the past two years, showing its ability to "land" new contracts and potentially "expand" them later - a powerful one-two punch for sales
- Free cash flow margin grew by 21.3 percentage points over the last five years, giving the company more chips to play with
- Historical investments are beginning to pay off as its returns on capital are growing
Hims & Hers Health is trading at $44.25 per share, or 36.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
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-micro-cap company Tecnoglass (+1,754% 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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