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.

The risks that can come from buying these assets is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here is one growth stock where the best is yet to come and two whose momentum may slow.

Two Growth Stocks to Sell:

First Watch (FWRG)

One-Year Revenue Growth: +17.3%

Based on a nautical reference to the first work shift aboard a ship, First Watch (NASDAQ: FWRG) is a chain of breakfast and brunch restaurants whose menu is heavily-focused on eggs and griddle items such as pancakes.

Why Does FWRG Worry Us?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
2. Cash burn has widened over the last year, making us question whether it can reliably generate shareholder value
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

At $17.68 per share, First Watch trades at 49.5x forward P/E. If you’re considering FWRG for your portfolio, see our FREE research report to learn more.

First Financial Bankshares (FFIN)

One-Year Revenue Growth: +17.4%

With roots dating back to 1890 and a network spanning over 70 locations across the Lone Star State, First Financial Bankshares (NASDAQ: FFIN) is a Texas-focused regional bank providing commercial banking, trust services, and wealth management across numerous communities throughout the state.

Why Are We Hesitant About FFIN?

1. Annual revenue growth of 5.7% over the last five years was below our standards for the banking sector
2. Muted 7.7% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
3. Earnings growth underperformed the sector average over the last five years as its EPS grew by just 5.3% annually

First Financial Bankshares is trading at $31.78 per share, or 2.4x forward P/B. To fully understand why you should be careful with FFIN, check out our full research report (it’s free for active Edge members).

One Growth Stock to Buy:

Sea (SE)

One-Year Revenue Growth: +35.9%

Founded in 2009 and a publicly traded company since 2017, Sea (NYSE: SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.

Why Will SE Beat the Market?

1. Paying Users have increased by an average of 21.9% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 42.6% over the last three years outstripped its revenue performance
3. Free cash flow margin increased by 36 percentage points over the last few years, giving the company more capital to invest or return to shareholders

Sea’s stock price of $134.46 implies a valuation ratio of 22.3x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.

Stocks We Like Even More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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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