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. On that note, here are two growth stocks expanding their competitive advantages and one whose momentum may slow.
One Growth Stock to Sell:
Freshpet (FRPT)
One-Year Revenue Growth: +19.3%
Standing out from typical processed pet foods, Freshpet (NASDAQ: FRPT) is a pet food company whose product portfolio includes natural meals and treats for dogs and cats.
Why Are We Cautious About FRPT?
- Smaller revenue base of $1.04 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Negative returns on capital show that some of its growth strategies have backfired
At $64.60 per share, Freshpet trades at 41.7x forward P/E. If you’re considering FRPT for your portfolio, see our FREE research report to learn more.
Two Growth Stocks to Watch:
HubSpot (HUBS)
One-Year Revenue Growth: +19%
Started in 2006 by two MIT grad students, HubSpot (NYSE: HUBS) is a software-as-a-service platform that helps small and medium-sized businesses market themselves, sell, and get found on the internet.
Why Are We Fans of HUBS?
- Billings growth has averaged 21.3% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Forecasted revenue growth of 16.9% for the next 12 months indicates its momentum over the last three years is sustainable
- Software is difficult to replicate at scale and leads to a top-tier gross margin of 84.6%
HubSpot is trading at $437.50 per share, or 6.9x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
DraftKings (DKNG)
One-Year Revenue Growth: +25.8%
Getting its start in daily fantasy sports, DraftKings (NASDAQ: DKNG) is a digital sports entertainment and gaming company.
Why Do We Like DKNG?
- Number of monthly unique players has surged, pointing to elevated demand
- Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
- Earnings per share grew by 22.2% annually over the last five years, massively outpacing its peers
DraftKings’s stock price of $43.15 implies a valuation ratio of 21.2x forward EV-to-EBITDA. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s April 2025 "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 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
