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.

The risks that can come from buying these assets is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. Keeping that in mind, here are two growth stocks with significant upside potential and one climbing an uphill battle.

One Growth Stock to Sell:

Encore Capital Group (ECPG)

One-Year Revenue Growth: +15.5%

Operating in the often misunderstood world of debt collection since 1999, Encore Capital Group (NASDAQ: ECPG) purchases portfolios of defaulted consumer debt at deep discounts and works with individuals to recover these obligations while helping them toward financial recovery.

Why Are We Cautious About ECPG?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
2. Earnings per share fell by 49% annually over the last five years while its revenue was flat, showing each sale was less profitable
3. 13× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

Encore Capital Group is trading at $41.38 per share, or 6.3x forward P/E. Read our free research report to see why you should think twice about including ECPG in your portfolio.

Two Growth Stocks to Watch:

Robinhood (HOOD)

One-Year Revenue Growth: +59.4%

With a mission to democratize finance, Robinhood (NASDAQ: HOOD) is an online consumer finance platform known for its commission-free stock and crypto trading.

Why Is HOOD a Top Pick?

1. 40.9% annual increases in its average revenue per user over the last two years show its platform is resonating with power users
2. Incremental sales over the last three years have been highly profitable as its earnings per share increased by 54.6% annually, topping its revenue gains
3. HOOD is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute

Robinhood’s stock price of $144.35 implies a valuation ratio of 46.6x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.

SoundHound AI (SOUN)

One-Year Revenue Growth: +137%

Born from the idea that machines should understand human speech as naturally as people do, SoundHound AI (NASDAQ: SOUN) develops voice recognition and conversational intelligence technology that enables businesses to integrate voice assistants into their products and services.

Why Does SOUN Catch Our Eye?

1. Average billings growth of 202% over the last year enhances its liquidity and shows there is steady demand for its products
2. Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
3. User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs

At $18.03 per share, SoundHound AI trades at 39.1x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .

Stocks We Like Even More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.