Growth boosts valuation multiples, but it doesn’t always last forever. Companies that cannot maintain it are often penalized with large declines in market value, a lesson ingrained in investors who lost money in tech stocks during 2022.

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. On that note, here are two growth stocks with significant upside potential and one climbing an uphill battle.

One Growth Stock to Sell:

VSE Corporation (VSEC)

One-Year Revenue Growth: +31.2%

With roots dating back to 1959 and a strategic focus on extending the life of transportation assets, VSE Corporation (NASDAQ: VSEC) provides aftermarket parts distribution and maintenance, repair, and overhaul services for aircraft and vehicle fleets in commercial and government markets.

Why Do We Think Twice About VSEC?

1. Gross margin of 12.3% reflects its high production costs
2. Cash-burning history makes us doubt the long-term viability of its business model
3. ROIC of 5% reflects management’s challenges in identifying attractive investment opportunities

At $141 per share, VSE Corporation trades at 38.3x forward P/E. If you’re considering VSEC for your portfolio, see our FREE research report to learn more.

Two Growth Stocks to Watch:

Marvell Technology (MRVL)

One-Year Revenue Growth: +21.6%

Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.

Why Do We Like MRVL?

1. Market share has increased this cycle as its 18.9% annual revenue growth over the last five years was exceptional
2. Exciting sales outlook for the upcoming 12 months calls for 31.9% growth, an acceleration from its two-year trend
3. Additional sales over the last five years increased its profitability as the 23.5% annual growth in its earnings per share outpaced its revenue

Marvell Technology is trading at $69.40 per share, or 23.5x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.

PennyMac Financial Services (PFSI)

One-Year Revenue Growth: +22.4%

Founded during the 2008 financial crisis to help address the mortgage market meltdown, PennyMac Financial Services (NYSE: PFSI) is a specialty financial services company that originates, services, and manages investments related to residential mortgage loans in the United States.

Why Is PFSI a Top Pick?

1. Incremental sales significantly boosted profitability as its annual earnings per share growth of 57.4% over the last two years outstripped its revenue performance
2. Annual tangible book value per share growth of 20.5% over the past five years was outstanding, reflecting strong capital retention this cycle
3. Capital strength is on track to rise over the next 12 months as its 20.5% projected tangible book value per share growth implies profitability will accelerate from its two-year trend

PennyMac Financial Services’s stock price of $98.52 implies a valuation ratio of 1.2x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking 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 Kadant (+351% 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.