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. That said, here are two growth stocks with significant upside potential and one that could be down big.
One Growth Stock to Sell:
Ready Capital (RC)
One-Year Revenue Growth: +327%
Operating as one of only 17 non-bank Small Business Lending Companies with preferred lender status from the SBA, Ready Capital (NYSE: RC) is a multi-strategy real estate finance company that originates, acquires, and services commercial real estate loans, small business loans, and other real estate investments.
Why Do We Steer Clear of RC?
- 1.3% annual revenue growth over the last two years was slower than its banking peers
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 18.6% annually
- Loan losses and capital returns have eroded its tangible book value per share this cycle as its tangible book value per share declined by 5.7% annually over the last five years
Ready Capital’s stock price of $3.87 implies a valuation ratio of 0.4x forward P/B. To fully understand why you should be careful with RC, check out our full research report (it’s free).
Two Growth Stocks to Watch:
Toast (TOST)
One-Year Revenue Growth: +26.1%
Founded by three MIT engineers at a local Cambridge bar, Toast (NYSE: TOST) provides integrated point-of-sale (POS) hardware, software, and payments solutions for restaurants.
Why Does TOST Stand Out?
- Ability to secure long-term commitments with customers is evident in its 30.8% ARR growth over the last year
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable three-year growth trajectory
- Operating margin expanded by 7.2 percentage points over the last year as it scaled and became more efficient
Toast is trading at $43.55 per share, or 3.9x forward price-to-sales. Is now the right time to buy? See for yourself in our full research report, it’s free.
Republic Bancorp (RBCAA)
One-Year Revenue Growth: +15%
With roots dating back to 1974 and operating across multiple states including Kentucky, Indiana, Florida, Ohio, and Tennessee, Republic Bancorp (NASDAQGS:RBCA.A) is a Kentucky-based financial holding company that operates a bank offering traditional banking, mortgage services, and specialized financial products.
Why Are We Positive On RBCAA?
- Impressive 10.3% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Differentiated product suite results in a Strong performance of its loan book results in a High-yielding loan book and low cost of funds result in a best-in-class net interest margin of 5%
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 13.2% annually, topping its revenue gains
At $69.31 per share, Republic Bancorp trades at 1.2x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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