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. On that note, here is one growth stock where the best is yet to come and two climbing an uphill battle.
Two Growth Stocks to Sell:
ThredUp (TDUP)
One-Year Revenue Growth: +17.4%
Founded to revolutionize thrifting, ThredUp (NASDAQ: TDUP) is a leading online fashion resale marketplace offering a wide selection of gently-used clothing and accessories.
Why Does TDUP Worry Us?
- Performance surrounding its orders has lagged its peers
- Persistent operating margin losses suggest the business manages its expenses poorly
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
At $7.08 per share, ThredUp trades at 56.6x forward EV-to-EBITDA. To fully understand why you should be careful with TDUP, check out our full research report (it’s free for active Edge members).
Hamilton Insurance Group (HG)
One-Year Revenue Growth: +21.9%
Founded in 2013 and operating through three distinct underwriting platforms across four countries, Hamilton Insurance Group (NYSE: HG) operates global specialty insurance and reinsurance platforms across Lloyd's, Ireland, Bermuda, and the United States.
Why Does HG Fall Short?
- Projected sales decline of 2.1% for the next 12 months points to a tough demand environment ahead
- Costs have risen faster than its revenue over the last two years, causing its combined ratio to worsen by 5.9 percentage points
- Earnings per share have contracted by 56.9% annually over the last one years, a headwind for returns as stock prices often echo long-term EPS performance
Hamilton Insurance Group is trading at $25.75 per share, or 0.9x forward P/B. Check out our free in-depth research report to learn more about why HG doesn’t pass our bar.
One Growth Stock to Buy:
Alignment Healthcare (ALHC)
One-Year Revenue Growth: +47.4%
Founded in 2013 with a mission to transform healthcare for seniors, Alignment Healthcare (NASDAQ: ALHC) provides Medicare Advantage health plans for seniors with features like concierge services, transportation benefits, and technology-driven care coordination.
Why Are We Backing ALHC?
- Business is winning new contracts that can potentially increase in value as its customer base averaged 41.2% growth over the past two years
- Earnings per share grew by 30.1% annually over the last four years and trumped its peers
- Free cash flow profile has moved into positive territory over the last five years, indicating the company has passed a significant test
Alignment Healthcare’s stock price of $16.42 implies a valuation ratio of 80.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
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 6 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 Tecnoglass (+1,754% 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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