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.
Luckily for you, our job at StockStory is to help you avoid short-term fads by pointing you toward high-quality businesses that can generate sustainable long-term growth. Keeping that in mind, here is one growth stock expanding its competitive advantage and two whose momentum may slow.
Two Growth Stocks to Sell:
Western Digital (WDC)
One-Year Revenue Growth: +27.7%
Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.
Why Is WDC Risky?
- Sales tumbled by 11.1% annually over the last five years, showing market trends are working against its favor during this cycle
- Negative 21.4% gross margin means it loses money on every sale and must pivot or scale quickly to survive
- Subpar operating margin of 3.8% constrains its ability to invest in process improvements or effectively respond to new competitive threats
Western Digital is trading at $67.48 per share, or 14x forward P/E. To fully understand why you should be careful with WDC, check out our full research report (it’s free).
EverQuote (EVER)
One-Year Revenue Growth: +113%
Aiming to simplify a once complicated process, EverQuote (NASDAQ: EVER) is an online insurance marketplace where consumers can compare and purchase various types of insurance from different providers
Why Do We Think Twice About EVER?
- Highly competitive market means it’s on the never-ending treadmill of sales and marketing spend
At $24.99 per share, EverQuote trades at 11.7x forward EV/EBITDA. Check out our free in-depth research report to learn more about why EVER doesn’t pass our bar.
One Growth Stock to Buy:
Hims & Hers Health (HIMS)
One-Year Revenue Growth: +86%
Originally launched with a focus on stigmatized conditions like hair loss and sexual health, Hims & Hers Health (NYSE: HIMS) operates a consumer-focused telehealth platform that connects patients with healthcare providers for prescriptions and wellness products.
Why Will HIMS Outperform?
- Business is winning new contracts that can potentially increase in value as its customer base averaged 48.6% growth over the past two years
- Earnings per share grew by 37% annually over the last four years, massively outpacing its peers
- Free cash flow margin increased by 23.5 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Hims & Hers Health’s stock price of $50.31 implies a valuation ratio of 37.8x forward EV-to-EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2024 "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 Growth Stocks for this month. 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
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