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 with significant upside potential and two climbing an uphill battle.
Two Growth Stocks to Sell:
Enovis (ENOV)
One-Year Revenue Growth: +18.3%
With a focus on helping patients regain or maintain their natural motion, Enovis (NYSE:ENOV) develops and manufactures medical devices for orthopedic care, from injury prevention and pain management to joint replacement and rehabilitation.
Why Is ENOV Risky?
- Sales tumbled by 9.1% annually over the last five years, showing market trends are working against its favor during this cycle
- Negative returns on capital show management lost money while trying to expand the business, and its falling returns suggest its earlier profit pools are drying up
Enovis is trading at $33.34 per share, or 10.1x forward P/E. To fully understand why you should be careful with ENOV, check out our full research report (it’s free).
Fulton Financial (FULT)
One-Year Revenue Growth: +15.7%
Tracing its roots back to 1882 in the heart of Pennsylvania, Fulton Financial (NASDAQ:FULT) is a financial holding company that provides banking, lending, and wealth management services to consumers and businesses across five Mid-Atlantic states.
Why Does FULT Worry Us?
- Estimated net interest income growth of 3.1% for the next 12 months implies demand will slow from its four-year trend
- 4.4% annual tangible book value per share growth over the last five years was slower than its bank peers
- Estimated tangible book value per share growth of 7.3% for the next 12 months implies profitability will slow from its two-year trend
Fulton Financial’s stock price of $17.55 implies a valuation ratio of 1x forward P/B. If you’re considering FULT for your portfolio, see our FREE research report to learn more.
One Growth Stock to Buy:
Nvidia (NVDA)
One-Year Revenue Growth: +86.2%
Founded in 1993 by Jensen Huang and two former Sun Microsystems engineers, Nvidia (NASDAQ:NVDA) is a leading fabless designer of chips used in gaming, PCs, data centers, automotive, and a variety of end markets.
Why Are We Backing NVDA?
- Annual revenue growth of 140% over the last two years was superb and indicates its market share increased during this cycle
- Share buybacks catapulted its annual earnings per share growth to 80.2%, which outperformed its revenue gains over the last five years
- NVDA is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its rising cash conversion increases its margin of safety
At $142.21 per share, Nvidia trades at 30.3x forward P/E. Is now the right time to buy? See for yourself in our in-depth 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 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as ServiceNow (+178% 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.