The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to new product launches, positive news, or even a dedicated social media following.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. Keeping that in mind, here is one stock with the fundamentals to back up its performance and two that may correct.
Two Momentum Stocks to Sell:
Inspired (INSE)
One-Month Return: +14.3%
Specializing in digital casino gaming, Inspired (NASDAQ: INSE) is a provider of gaming hardware, virtual sports platforms, and server-based gaming systems.
Why Is INSE Not Exciting?
- Muted 1.9% annual revenue growth over the last two years shows its demand lagged behind its consumer discretionary peers
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- Low free cash flow margin of 3.5% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Inspired’s stock price of $9.34 implies a valuation ratio of 2.5x forward EV-to-EBITDA. If you’re considering INSE for your portfolio, see our FREE research report to learn more.
Bio-Techne (TECH)
One-Month Return: +14.1%
With a catalog of hundreds of thousands of specialized biological products used in laboratories worldwide, Bio-Techne (NASDAQ: TECH) develops and manufactures specialized reagents, instruments, and services that help researchers study biological processes and enable diagnostic testing and cell therapy development.
Why Does TECH Worry Us?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Subscale operations are evident in its revenue base of $1.21 billion, meaning it has fewer distribution channels than its larger rivals
- Free cash flow margin dropped by 8.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up
At $58.72 per share, Bio-Techne trades at 28.2x forward P/E. Read our free research report to see why you should think twice about including TECH in your portfolio.
One Momentum Stock to Watch:
AZZ (AZZ)
One-Month Return: +16.1%
Responsible for projects like nuclear facilities, AZZ (NYSE: AZZ) is a provider of metal coating and power infrastructure solutions.
Why Does AZZ Stand Out?
- Healthy operating margin of 14.7% shows it’s a well-run company with efficient processes, and its rise over the last five years was fueled by some leverage on its fixed costs
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 24.5% annually, topping its revenue gains
- Free cash flow margin jumped by 13.5 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
AZZ is trading at $109.69 per share, or 18.1x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 6 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
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