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.
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 expanding its competitive advantage and two whose momentum may slow.
Two Growth Stocks to Sell:
ThredUp (TDUP)
One-Year Revenue Growth: +17.4%
Founded to revolutionize thrifting, ThredUp (NASDAQ:TDUP) is a leading online fashion resale marketplace offering a wide selection of gently-used clothing and accessories.
Why Do We Think TDUP Will Underperform?
- Demand for its offerings was relatively low as its number of orders has underwhelmed
- Historical operating margin losses point to an inefficient cost structure
- Cash-burning history makes us doubt the long-term viability of its business model
ThredUp’s stock price of $5.95 implies a valuation ratio of 47x forward EV-to-EBITDA. To fully understand why you should be careful with TDUP, check out our full research report (it’s free).
Graham Corporation (GHM)
One-Year Revenue Growth: +16%
Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE:GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors.
Why Does GHM Fall Short?
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Graham Corporation is trading at $72.87 per share, or 49.1x forward P/E. Read our free research report to see why you should think twice about including GHM in your portfolio.
One Growth Stock to Buy:
Zscaler (ZS)
One-Year Revenue Growth: +23.2%
Pioneering the "zero trust" approach that has fundamentally changed enterprise network security, Zscaler (NASDAQ:ZS) provides a cloud-based security platform that connects users, devices, and applications securely without traditional network-based security hardware.
Why Will ZS Outperform?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 26.3% over the last year
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Robust free cash flow margin of 29.9% gives it many options for capital deployment
At $216.70 per share, Zscaler trades at 10x forward price-to-sales. Is now a good time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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.