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.

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 are two growth stocks where the best is yet to come and one that could be down big.

One Growth Stock to Sell:

Champion Homes (SKY)

One-Year Revenue Growth: +16.9%

Founded in 1951, Champion Homes (NYSE: SKY) is a manufacturer of modular homes and buildings in North America.

Why Does SKY Fall Short?

1. 4.4% annual revenue growth over the last two years was slower than its industrials peers
2. Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 19.2% annually
3. Eroding returns on capital suggest its historical profit centers are aging

Champion Homes’s stock price of $74.73 implies a valuation ratio of 22.3x forward P/E. Read our free research report to see why you should think twice about including SKY in your portfolio.

Two Growth Stocks to Watch:

ServiceNow (NOW)

One-Year Revenue Growth: +21.1%

Built on a single code base that processes over 4 billion workflow transactions daily, ServiceNow (NYSE: NOW) provides a cloud-based platform that helps organizations automate and digitize workflows across departments, from IT and HR to customer service and security.

Why Is NOW a Good Business?

1. Demand is healthy as its current remaining performance obligations (cRPO) have averaged 22.9% growth over the last year, showing it’s securing new contracts for services yet to be fulfilled
2. Disciplined cost controls and effective management resulted in a strong trailing 12-month operating margin of 13.3%, and its operating leverage amplified its profits over the last year
3. NOW is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

At $886.51 per share, ServiceNow trades at 13x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Datadog (DDOG)

One-Year Revenue Growth: +26%

Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ: DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.

Why Are We Fans of DDOG?

1. ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
2. Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

Datadog is trading at $133.10 per share, or 13x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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 6 Stocks for this week. 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 Exlservice (+354% 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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