Growth is oxygen. But when it evaporates, the consequences can be extreme - ask anyone who bought Cisco in the Dot-Com Bubble (Nvidia?) or newer investors who lived through the 2020 to 2022 COVID cycle.
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 is one growth stock with significant upside potential and two whose momentum may slow.
Two Growth Stocks to Sell:
RTX (RTX)
One-Year Revenue Growth: +17.1%
Originally focused on refrigeration technology, Raytheon (NSYE:RTX) provides a a variety of products and services to the aerospace and defense industries.
Why Are We Wary of RTX?
- Estimated sales growth of 4.6% for the next 12 months implies demand will slow from its two-year trend
- Revenue growth over the past five years was nullified by the company’s new share issuances as its earnings per share fell by 1.9% annually
- ROIC of 2.4% reflects management’s challenges in identifying attractive investment opportunities
At $128.60 per share, RTX trades at 20.9x forward price-to-earnings. If you’re considering RTX for your portfolio, see our FREE research report to learn more.
ANI Pharmaceuticals (ANIP)
One-Year Revenue Growth: +26.2%
Founded in 2001, ANI Pharmaceuticals (NASDAQ: ANIP) develops, manufactures, and markets branded and generic pharmaceutical products, with a focus on complex formulations and niche markets.
Why Is ANIP Not Exciting?
- Subscale operations are evident in its revenue base of $614.4 million, meaning it has fewer distribution channels than its larger rivals
- Issuance of new shares partly offset its revenue growth over the last five years as its earnings per share were flat
- Push for growth has led to negative returns on capital, signaling value destruction
ANI Pharmaceuticals is trading at $62.11 per share, or 11.6x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than ANIP.
One Growth Stock to Buy:
Deckers (DECK)
One-Year Revenue Growth: +19.5%
Established in 1973, Deckers (NYSE: DECK) is a footwear and apparel conglomerate with a portfolio of lifestyle and performance brands.
Why Are We Bullish on DECK?
- Brand and reputation resonate with consumers, as seen in its above-market 18% annual sales growth over the last five years
- Free cash flow margin is anticipated to expand by 2.6 percentage points over the next year, providing additional flexibility for investments and share buybacks/dividends
- Returns on capital are climbing as management makes more lucrative bets
Deckers’s stock price of $123.23 implies a valuation ratio of 19x forward price-to-earnings. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.
Get started 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 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.
