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 climbing an uphill battle.
Two Growth Stocks to Sell:
Guidewire (GWRE)
One-Year Revenue Growth: +18.6%
Founded by two individuals involved in the development of leading procurement software Ariba, Guidewire (NYSE: GWRE) offers insurance companies a software-as-a-service platform to help sell their products and manage their workflows.
Why Does GWRE Worry Us?
- 12.6% annual revenue growth over the last three years was slower than its software peers
- High servicing costs result in a relatively inferior gross margin of 61.9% that must be offset through increased usage
Guidewire’s stock price of $213.17 implies a valuation ratio of 14.3x forward price-to-sales. To fully understand why you should be careful with GWRE, check out our full research report (it’s free).
Casella Waste Systems (CWST)
One-Year Revenue Growth: +20.3%
Starting with the founder picking up garbage with a pickup truck he purchased using savings from high school, Casella (NASDAQ: CWST) offers waste management services for businesses, residents, and the government.
Why Are We Wary of CWST?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Efficiency has decreased over the last five years as its operating margin fell by 4.7 percentage points
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up
Casella Waste Systems is trading at $98.74 per share, or 83.1x forward P/E. Read our free research report to see why you should think twice about including CWST in your portfolio.
One Growth Stock to Watch:
Primoris (PRIM)
One-Year Revenue Growth: +15.1%
Listed on the NASDAQ in 2008, Primoris (NYSE: PRIM) builds, maintains, and upgrades infrastructure in the utility, energy, and civil construction industries.
Why Could PRIM Be a Winner?
- Market share has increased this cycle as its 15.9% annual revenue growth over the last five years was exceptional
- Demand is greater than supply as the company’s 159% average backlog growth over the past two years shows it’s securing new contracts and accumulating more orders than it can fulfill
- Earnings per share grew by 28.6% annually over the last two years and trumped its peers
At $110.69 per share, Primoris trades at 24.1x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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 5 Growth Stocks for this month. 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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