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 climbing an uphill battle.
Two Growth Stocks to Sell:
U.S. Physical Therapy (USPH)
One-Year Revenue Growth: +16.2%
With a nationwide footprint spanning 671 clinics across 42 states, U.S. Physical Therapy (NYSE: USPH) operates a network of outpatient physical therapy clinics and provides industrial injury prevention services to employers across the United States.
Why Is USPH Not Exciting?
- Smaller revenue base of $729.6 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 9 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
U.S. Physical Therapy’s stock price of $87.43 implies a valuation ratio of 33.7x forward P/E. If you’re considering USPH for your portfolio, see our FREE research report to learn more.
WesBanco (WSBC)
One-Year Revenue Growth: +30.3%
Tracing its roots back to 1870 in West Virginia, WesBanco (NASDAQ: WSBC) is a bank holding company that provides retail and commercial banking, trust services, insurance, and investment products through its subsidiaries across several Midwestern and Mid-Atlantic states.
Why Are We Cautious About WSBC?
- Net interest margin of 3.1% reflects its high servicing and capital costs
- Tangible book value per share stagnated over the last five years, limiting its ability to leverage its balance sheet to make additional investments
- ROE of 6.7% reflects management’s challenges in identifying attractive investment opportunities
At $32.83 per share, WesBanco trades at 0.8x forward P/B. To fully understand why you should be careful with WSBC, check out our full research report (it’s free).
One Growth Stock to Buy:
Super Micro (SMCI)
One-Year Revenue Growth: +46.6%
Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ: SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Why Are We Bullish on SMCI?
- Annual revenue growth of 75.6% over the past two years was outstanding, reflecting market share gains this cycle
- Unparalleled revenue scale of $21.97 billion gives it an edge in distribution
- Free cash flow profile has moved into positive territory over the last five years, showing the company has crossed a key inflection point
Super Micro is trading at $44.05 per share, or 15.8x forward P/E. Is now the right time to buy? Find out 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
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