Growth is a hallmark of all great companies, but the laws of gravity eventually take hold. Those who rode the COVID boom and ensuing tech selloff in 2022 will surely remember that the market’s punishment can be swift and severe when trajectories fall.
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 is one growth stock with significant upside potential and two that could be down big.
Two Growth Stocks to Sell:
Autodesk (ADSK)
One-Year Revenue Growth: +18.3%
Starting with AutoCAD in the 1980s and evolving into a comprehensive design ecosystem, Autodesk (NASDAQ: ADSK) provides software solutions for architecture, engineering, construction, manufacturing, and entertainment industries to design, simulate, and visualize projects.
Why Are We Cautious About ADSK?
- Annual revenue growth of 14% over the last five years was below our standards for the software sector
- Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
- Operating margin improvement of 4.8 percentage points over the last year demonstrates its ability to scale efficiently
Autodesk is trading at $229.25 per share, or 6x forward price-to-sales. If you’re considering ADSK for your portfolio, see our FREE research report to learn more.
ePlus (PLUS)
One-Year Revenue Growth: +22.1%
Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ: PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.
Why Are We Wary of PLUS?
- 4.8% annual revenue growth over the last two years was slower than its business services peers
- Annual earnings per share growth of 3.2% underperformed its revenue over the last two years, showing its incremental sales were less profitable
- 2.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
ePlus’s stock price of $80.37 implies a valuation ratio of 15.8x forward P/E. Read our free research report to see why you should think twice about including PLUS in your portfolio.
One Growth Stock to Buy:
Hims & Hers Health (HIMS)
One-Year Revenue Growth: +32.8%
Originally launched with a focus on stigmatized conditions like hair loss and sexual health, Hims & Hers Health (NYSE: HIMS) operates a consumer-focused telehealth platform that connects patients with healthcare providers for prescriptions and wellness products.
Why Is HIMS a Good Business?
- Average customer growth of 26.1% over the past two years demonstrates success in acquiring new clients that could increase their spending in the future
- Free cash flow margin grew by 16.1 percentage points over the last five years, giving the company more chips to play with
- Rising returns on capital show the company is starting to reap the benefits of its past investments
At $26.80 per share, Hims & Hers Health trades at 22x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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.
