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 where the best is yet to come and one climbing an uphill battle.
One Growth Stock to Sell:
Lincoln Educational (LINC)
One-Year Revenue Growth: +15.2%
Established in 1946, Lincoln Educational (NASDAQ: LINC) is a provider of specialized technical training in the United States, offering career-oriented programs to provide practical skills required in the workforce.
Why Do We Pass on LINC?
- Sluggish trends in its enrolled students suggest customers aren’t adopting its solutions as quickly as the company hoped
- Cash-burning history makes us doubt the long-term viability of its business model
- Diminishing returns on capital suggest its earlier profit pools are drying up
Lincoln Educational is trading at $22.65 per share, or 11.5x forward EV-to-EBITDA. If you’re considering LINC for your portfolio, see our FREE research report to learn more.
Two Growth Stocks to Watch:
Snowflake (SNOW)
One-Year Revenue Growth: +27.5%
Founded in 2013 by three French engineers who spent decades working for Oracle, Snowflake (NYSE: SNOW) provides a data warehouse-as-a-service in the cloud that allows companies to store large amounts of data and analyze it in real time.
Why Does SNOW Stand Out?
- Billings have averaged 26.5% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Net revenue retention rate of 126% demonstrates its ability to expand within existing accounts through upsells and cross-sells
- Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
At $217.49 per share, Snowflake trades at 15.1x forward price-to-sales. Is now the right time to buy? See for yourself in our full research report, it’s free.
Netflix (NFLX)
One-Year Revenue Growth: +15%
Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform.
Why Are We Backing NFLX?
- Has the opportunity to boost monetization through new features and premium offerings as its global streaming paid memberships have grown by 13.5% annually over the last two years
- Excellent EBITDA margin of 27% highlights the efficiency of its business model, and its rise over the last few years was fueled by some leverage on its fixed costs
- Free cash flow margin increased by 18.6 percentage points over the last few years, giving the company more capital to invest or return to shareholders
Netflix’s stock price of $1,284 implies a valuation ratio of 39.6x forward EV/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
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
