Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.

However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. Keeping that in mind, here is one stock with lasting competitive advantages and two not so much.

Two Momentum Stocks to Sell:

Domo (DOMO)

One-Month Return: +65.4%

Founded by Josh James after selling his former business Omniture to Adobe, Domo (NASDAQ: DOMO) provides business intelligence software that allows managers to access and visualize critical business metrics in real-time, using their smartphones.

Why Are We Out on DOMO?

1. Offerings couldn’t generate interest over the last year as its billings have averaged 2.4% declines
2. Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

Domo is trading at $12.85 per share, or 1.6x forward price-to-sales. If you’re considering DOMO for your portfolio, see our FREE research report to learn more.

Dave & Buster's (PLAY)

One-Month Return: +15.7%

Founded by a former game parlor and bar operator, Dave & Buster’s (NASDAQ: PLAY) operates a chain of arcades providing immersive entertainment experiences.

Why Do We Avoid PLAY?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its stores
2. Cash-burning history makes us doubt the long-term viability of its business model
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

Dave & Buster’s stock price of $22.31 implies a valuation ratio of 8.1x forward P/E. Read our free research report to see why you should think twice about including PLAY in your portfolio.

One Momentum Stock to Buy:

Insulet (PODD)

One-Month Return: +26%

Revolutionizing diabetes care with its tubeless "Pod" technology, Insulet (NASDAQ: PODD) develops and manufactures innovative insulin delivery systems for people with diabetes, primarily through its Omnipod product line.

Why Will PODD Beat the Market?

1. Steady constant currency growth over the past two years shows the company can pursue its global ambitions, even in uncertain economic times
2. Incremental sales over the last five years have been highly profitable as its earnings per share increased by 113% annually, topping its revenue gains
3. Free cash flow margin grew by 21.9 percentage points over the last five years, giving the company more chips to play with

At $323.79 per share, Insulet trades at 73.5x forward P/E. Is now a good 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 6 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.