Growth is oxygen. But when it evaporates, the consequences can be severe - ask anyone who bought Cisco in the Dot-Com Bubble or newer investors who lived through the 2020 to 2022 COVID cycle.
The risks that can come from buying these assets is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. On that note, here are two growth stocks expanding their competitive advantages and one whose momentum may slow.
One Growth Stock to Sell:
EVgo (EVGO)
One-Year Revenue Growth: +49.1%
Created through a settlement between NRG Energy and the California Public Utilities Commission, EVgo (NASDAQ: EVGO) is a provider of electric vehicle charging solutions, operating fast charging stations across the United States.
Why Does EVGO Give Us Pause?
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $4.10 per share, EVgo trades at 18.4x forward EV-to-EBITDA. To fully understand why you should be careful with EVGO, check out our full research report (it’s free).
Two Growth Stocks to Watch:
Cadence Design Systems (CDNS)
One-Year Revenue Growth: +22.3%
Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ: CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors.
Why Is CDNS on Our Radar?
- Billings growth has averaged 25.5% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
- Strong free cash flow margin of 31.1% enables it to reinvest or return capital consistently
Cadence Design Systems is trading at $350.41 per share, or 17.2x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
Bowhead Specialty (BOW)
One-Year Revenue Growth: +41.2%
Named after the Arctic bowhead whale known for navigating challenging waters, Bowhead Specialty Holdings (NYSE: BOW) is a specialty insurance company that provides customized coverage for complex and high-risk commercial sectors.
Why Is BOW a Good Business?
- Market penetration was impressive this cycle as its net premiums earned expanded by 39.9% annually over the last two years
- Notable projected revenue growth of 21.1% for the next 12 months hints at market share gains
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 53.7% over the last two years outstripped its revenue performance
Bowhead Specialty’s stock price of $31.74 implies a valuation ratio of 2.4x forward P/B. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 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
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