The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. On that note, here is one stock we think lives up to the hype and two best left ignored.
Two Momentum Stocks to Sell:
nLIGHT (LASR)
One-Month Return: +36%
Founded by a former CEO and Harvard-educated entrepreneur Scott Keeneyn, nLIGHT (NASDAQ: LASR) offers semiconductor and fiber lasers to the industrial, aerospace & defense, and medical sectors.
Why Should You Dump LASR?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.6% annually over the last two years
- 6.4 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
nLIGHT is trading at $28.60 per share, or 5.7x forward price-to-sales. Dive into our free research report to see why there are better opportunities than LASR.
Array (ARRY)
One-Month Return: +53%
Going public in October 2020, Array (NASDAQ: ARRY) is a global manufacturer of ground-mounting tracking systems for utility and distributed generation solar energy projects.
Why Do We Avoid ARRY?
- Underwhelming unit sales over the past two years suggest it might have to lower prices to accelerate growth
- Low free cash flow margin of -0.4% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
At $9.18 per share, Array trades at 13.2x forward P/E. If you’re considering ARRY for your portfolio, see our FREE research report to learn more.
One Momentum Stock to Buy:
Bloom Energy (BE)
One-Month Return: +43.1%
Working in stealth mode for eight years, Bloom Energy (NYSE: BE) designs, manufactures, and markets solid oxide fuel cell systems for on-site power generation.
Why Do We Love BE?
- Annual revenue growth of 15.8% over the last five years was superb and indicates its market share increased during this cycle
- Free cash flow profile has moved into positive territory over the last five years, showing the company has crossed a key inflection point
- Rising returns on capital show the company is starting to reap the benefits of its past investments
Bloom Energy’s stock price of $51.65 implies a valuation ratio of 85.9x forward P/E. Is now the time to initiate a position? Find out 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 9 Market-Beating Stocks. 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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