Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. Keeping that in mind, here are two stocks with the fundamentals to back up their performance and one that may correct.
One Momentum Stock to Sell:
BWX (BWXT)
One-Month Return: +22.4%
Contributing components and materials to the famous Manhattan Project in the 1940s, BWX (NYSE: BWXT) is a manufacturer and service provider of nuclear components and fuel for government and commercial industries.
Why Does BWXT Worry Us?
- Annual revenue growth of 6.9% over the last five years was below our standards for the industrials sector
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 2.3 percentage points
- Earnings per share lagged its peers over the last five years as they only grew by 4.2% annually
At $175 per share, BWX trades at 47x forward P/E. Dive into our free research report to see why there are better opportunities than BWXT.
Two Momentum Stocks to Watch:
AppLovin (APP)
One-Month Return: +20.5%
Sitting at the crossroads of the mobile advertising ecosystem with over 200 free-to-play games in its portfolio, AppLovin (NASDAQ: APP) provides software solutions that help mobile app developers market, monetize, and grow their apps through AI-powered advertising and analytics tools.
Why Are We Bullish on APP?
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- Highly efficient business model is illustrated by its impressive 52% operating margin, and its operating leverage amplified its profits over the last year
- Strong free cash flow margin of 53.7% enables it to reinvest or return capital consistently
AppLovin is trading at $439 per share, or 24.1x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
Warby Parker (WRBY)
One-Month Return: +13.4%
Founded in 2010, Warby Parker (NYSE: WRBY) designs, manufactures, and sells eyewear, including prescription glasses, sunglasses, and contact lenses, through its e-commerce platform and physical retail locations.
Why Does WRBY Stand Out?
- Aggressive expansion of new stores reflects an offensive push to quickly grow and sell in markets where it has few or no locations
- Differentiated product assortment results in a best-in-class gross margin of 54.9%
- Earnings per share grew by 68.5% annually over the last three years and trumped its peers
Warby Parker’s stock price of $27.13 implies a valuation ratio of 76.6x forward P/E. Is now the right time to buy? See for yourself in our in-depth 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-small-cap company Comfort Systems (+782% 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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