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. On that note, here are three growth stocks facing an uphill battle and some other opportunities you should consider instead.
Bally's (BALY)
One-Year Revenue Growth: +15.6%
Headquartered in Providence, Rhode Island, Bally's Corporation (NYSE: BALY) is a diversified global casino-entertainment company that owns and manages casinos, resorts, and online gaming platforms.
Why Do We Steer Clear of BALY?
- Muted 6.9% annual revenue growth over the last two years shows its demand lagged behind its consumer discretionary peers
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Bally’s stock price of $13.61 implies a valuation ratio of 13.6x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than BALY.
Sunrun (RUN)
One-Year Revenue Growth: +63.2%
Helping homeowners use solar energy to power their homes, Sunrun (NASDAQ: RUN) provides residential solar electricity, specializing in panel installation and leasing services.
Why Does RUN Fall Short?
- Persistent operating margin losses suggest the business manages its expenses poorly
- Cash-burning history makes us doubt the long-term viability of its business model
At $7.80 per share, Sunrun trades at 10.1x forward P/E. To fully understand why you should be careful with RUN, check out our full research report (it’s free).
STAAR Surgical (STAA)
One-Year Revenue Growth: +51.3%
With over 2.5 million implants performed worldwide, STAAR Surgical (NASDAQ: STAA) designs and manufactures implantable lenses that correct vision problems without removing the eye's natural lens.
Why Should You Sell STAA?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Smaller revenue base of $339.6 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
STAAR Surgical is trading at $21.51 per share, or 22.3x forward P/E. Check out our free in-depth research report to learn more about why STAA doesn’t pass our bar.
Stocks We Like More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
