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.
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 are two growth stocks with significant upside potential and one facing an uphill battle.
One Growth Stock to Sell:
Ball (BALL)
One-Year Revenue Growth: +15.6%
Started with a $200 loan in 1880, Ball (NYSE:BALL) manufactures aluminum packaging for beverages, personal care, and household products as well as aerospace systems and other technologies.
Why Does BALL Give Us Pause?
- Annual sales growth of 2.3% over the last five years lagged behind its industrials peers as its large revenue base made it difficult to generate incremental demand
- Gross margin of 21.1% reflects its high production costs
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 0.1% for the last five years
Ball’s stock price of $63.42 implies a valuation ratio of 15.1x forward P/E. Dive into our free research report to see why there are better opportunities than BALL.
Two Growth Stocks to Watch:
AMD (AMD)
One-Year Revenue Growth: +39.5%
Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices (NASDAQ:AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.
Why Do We Like AMD?
- Impressive 25.4% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 65.8%
- Earnings growth has comfortably beaten the peer group average over the last five years as its EPS has compounded at 22.6% annually
At $466.03 per share, AMD trades at 42.9x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Nova (NVMI)
One-Year Revenue Growth: +16.2%
Headquartered in Israel, Nova (NASDAQ:NVMI) is a provider of quality control systems used in semiconductor manufacturing.
Why Is NVMI a Good Business?
- Impressive 23.4% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Excellent operating margin of 29% highlights the efficiency of its business model, and its profits increased over the last five years as it scaled
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 27.4% annually
Nova is trading at $358.44 per share, or 29.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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.