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. On that note, here is one growth stock where the best is yet to come and two whose momentum may slow.
Two Growth Stocks to Sell:
DraftKings (DKNG)
One-Year Revenue Growth: +25.8%
Getting its start in daily fantasy sports, DraftKings (NASDAQ: DKNG) is a digital sports entertainment and gaming company.
Why Should You Sell DKNG?
- 24.3% annual revenue growth over the last two years was slower than its consumer discretionary peers
- Suboptimal cost structure is highlighted by its history of operating margin losses
- Poor free cash flow margin of 9.5% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $26.37 per share, DraftKings trades at 20.7x forward P/E. Dive into our free research report to see why there are better opportunities than DKNG.
Enova (ENVA)
One-Year Revenue Growth: +17.5%
Pioneering online lending since 2004 with a massive database of over 65 terabytes of customer behavior data, Enova International (NYSE: ENVA) provides online financial services including installment loans and lines of credit to non-prime consumers and small businesses in the United States and Brazil.
Why Are We Hesitant About ENVA?
- Incremental sales over the last five years were less profitable as its 8.5% annual earnings per share growth lagged its revenue gains
- 5× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Enova’s stock price of $204.79 implies a valuation ratio of 11.4x forward P/E. If you’re considering ENVA for your portfolio, see our FREE research report to learn more.
One Growth Stock to Buy:
AppLovin (APP)
One-Year Revenue Growth: +51.3%
Sitting at the crossroads of the mobile advertising ecosystem with over 200 free-to-play games in its portfolio, AppLovin (NASDAQ: APP) provides software solutions that help mobile app developers market, monetize, and grow their apps through AI-powered advertising and analytics tools.
Why Are We Bullish on APP?
- Impressive 30.4% annual revenue growth over the last two years indicates it’s winning market share
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- Robust free cash flow margin of 71.9% gives it many options for capital deployment
AppLovin is trading at $469.00 per share, or 18.3x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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.
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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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
