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.

While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. On that note, here is one stock with lasting competitive advantages and two best left ignored.

Two Momentum Stocks to Sell:

Health Catalyst (HCAT)

One-Month Return: +8.6%

Founded by healthcare professionals Tom Burton and Steve Barlow in 2008, Health Catalyst (NASDAQ: HCAT) provides data and analytics technology to healthcare organizations, enabling them to improve care and lower costs.

Why Are We Cautious About HCAT?

1. Muted 7% annual revenue growth over the last three years shows its demand lagged behind its software peers
2. Gross margin of 45.9% reflects its high servicing costs
3. Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low

Health Catalyst’s stock price of $4.17 implies a valuation ratio of 0.8x forward price-to-sales. Dive into our free research report to see why there are better opportunities than HCAT.

Peloton (PTON)

One-Month Return: +7.5%

Started as a Kickstarter campaign, Peloton (NASDAQ: PTON) is a fitness technology company known for its at-home exercise equipment and interactive online workout classes.

Why Do We Steer Clear of PTON?

1. Number of connected fitness subscribers has disappointed over the past two years, indicating weak demand for its offerings
2. Sales are projected to tank by 5.1% over the next 12 months as its demand continues evaporating
3. Poor expense management has led to operating losses

At $6.13 per share, Peloton trades at 7.3x forward EV-to-EBITDA. If you’re considering PTON for your portfolio, see our FREE research report to learn more.

One Momentum Stock to Buy:

Magnite (MGNI)

One-Month Return: +60%

Born from the 2020 merger of Rubicon Project and Telaria, Magnite (NASDAQ: MGNI) operates the world's largest independent sell-side advertising platform that automates the buying and selling of digital advertising inventory across all channels and formats.

Why Should You Buy MGNI?

1. Annual revenue growth of 33.3% over the last five years was superb and indicates its market share increased during this cycle
2. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy
3. Rising returns on capital show the company is starting to reap the benefits of its past investments

Magnite is trading at $15.49 per share, or 16.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

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 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.

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 Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.