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. That said, here is one growth stock with significant upside potential and two that could be down big.
Two Growth Stocks to Sell:
JFrog (FROG)
One-Year Revenue Growth: +21.7%
Named after the founders' affinity for frogs, JFrog (NASDAQ: FROG) provides a software-as-a-service platform that makes developing and releasing software easier and faster, especially for large teams.
Why Does FROG Fall Short?
- Operating losses show it sacrificed profitability while scaling the business
- Free cash flow margin is forecasted to shrink by 6.6 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
JFrog is trading at $41.16 per share, or 9x forward price-to-sales. Dive into our free research report to see why there are better opportunities than FROG.
Lindblad Expeditions (LIND)
One-Year Revenue Growth: +15.7%
Founded by explorer Sven-Olof Lindblad in 1979, Lindblad Expeditions (NASDAQ: LIND) offers cruising experiences to remote destinations in partnership with National Geographic.
Why Do We Think LIND Will Underperform?
- Annual revenue growth of 14.9% over the last five years was below our standards for the consumer discretionary sector
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 29.7% annually while its revenue grew
- Push for growth has led to negative returns on capital, signaling value destruction
At $12.64 per share, Lindblad Expeditions trades at 6.1x forward EV-to-EBITDA. To fully understand why you should be careful with LIND, check out our full research report (it’s free).
One Growth Stock to Buy:
Natera (NTRA)
One-Year Revenue Growth: +51.5%
Founded in 2003 as Gene Security Network before rebranding in 2012, Natera (NASDAQ: NTRA) develops and commercializes genetic tests for prenatal screening, cancer detection, and organ transplant monitoring using its proprietary cell-free DNA technology.
Why Do We Love NTRA?
- Average unit sales growth of 23.1% over the past two years reflects steady demand for its products
- Adjusted operating margin improvement of 47.6 percentage points over the last two years demonstrates its ability to scale efficiently
- Free cash flow turned positive over the last five years, showing the company has crossed a key inflection point
Natera’s stock price of $161.02 implies a valuation ratio of 10.6x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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 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
