Growth is oxygen. But when it evaporates, the consequences can be severe - ask anyone who bought Cisco in the Dot-Com Bubble or newer investors who lived through the 2020 to 2022 COVID cycle.
Deciphering which businesses can sustain their high growth rates is a challenge for even the most seasoned professionals, which is why we started StockStory. Keeping that in mind, here are two growth stocks expanding their competitive advantages and one that could be down big.
One Growth Stock to Sell:
ServisFirst Bancshares (SFBS)
One-Year Revenue Growth: +16%
Founded in 2005 with a focus on serving underserved mid-sized businesses, ServisFirst Bancshares (NYSE: SFBS) is a bank holding company that provides commercial banking services to businesses and professionals through its subsidiary ServisFirst Bank.
Why Are We Hesitant About SFBS?
- Annual net interest income growth of 9.7% over the last five years was below our standards for the banking sector
- Weak unit economics are reflected in its net interest margin of 2.9%, one of the worst among bank companies
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 6.8% annually
ServisFirst Bancshares’s stock price of $72.25 implies a valuation ratio of 2.1x forward P/B. Check out our free in-depth research report to learn more about why SFBS doesn’t pass our bar.
Two Growth Stocks to Watch:
ESCO (ESE)
One-Year Revenue Growth: +16.2%
A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO (NYSE: ESE) is a provider of engineered components for the aerospace, defense, and utility sectors.
Why Do We Love ESE?
- Backlog has averaged 29% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
- Operating margin improvement of 4.3 percentage points over the last five years demonstrates its ability to scale efficiently
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 30.9% over the last two years outstripped its revenue performance
ESCO is trading at $195.21 per share, or 26.3x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
Cincinnati Financial (CINF)
One-Year Revenue Growth: +25.7%
Founded in 1950 by independent insurance agents seeking stable market options for their clients, Cincinnati Financial (NASDAQ: CINF) provides property casualty insurance, life insurance, and related financial services through independent agencies across 46 states.
Why Is CINF Interesting?
- Net premiums earned expanded by 12.1% annually over the last two years, demonstrating exceptional market penetration this cycle
- Share repurchases over the last five years enabled its annual earnings per share growth of 21.6% to outpace its revenue gains
- Impressive 20.8% annual book value per share growth over the last two years indicates it’s building equity value this cycle
At $162.71 per share, Cincinnati Financial trades at 1.6x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. 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-micro-cap company Kadant (+351% 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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