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 is one growth stock expanding its competitive advantage and two that could be down big.
Two Growth Stocks to Sell:
RXO (RXO)
One-Year Revenue Growth: +53.8%
With access to millions of trucks, RXO (NYSE: RXO) offers full-truckload, less-than-truckload, and last-mile deliveries.
Why Should You Dump RXO?
- Projected sales decline of 2.1% for the next 12 months points to a tough demand environment ahead
- Earnings per share fell by 22.7% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Negative returns on capital show that some of its growth strategies have backfired
RXO is trading at $10.59 per share, or 164x forward P/E. Read our free research report to see why you should think twice about including RXO in your portfolio.
Corcept (CORT)
One-Year Revenue Growth: +17.9%
Focusing on the powerful stress hormone that affects everything from metabolism to immune function, Corcept Therapeutics (NASDAQ: CORT) develops and markets medications that modulate cortisol to treat endocrine disorders, cancer, and neurological diseases.
Why Does CORT Give Us Pause?
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 24.7 percentage points
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 6.5% annually
- Free cash flow margin dropped by 21.3 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Corcept’s stock price of $81.05 implies a valuation ratio of 198.8x forward P/E. If you’re considering CORT for your portfolio, see our FREE research report to learn more.
One Growth Stock to Buy:
UMB Financial (UMBF)
One-Year Revenue Growth: +51.1%
With roots dating back to 1913 and a name derived from "United Missouri Bank," UMB Financial (NASDAQ: UMBF) is a financial holding company that provides banking, asset management, and fund services to commercial, institutional, and individual customers.
Why Should You Buy UMBF?
- Market share has increased this cycle as its 17.8% annual net interest income growth over the last five years was exceptional
- Productivity and efficiency ratio profits are expected to increase next year as some fixed cost leverage kicks in
- Earnings per share have massively outperformed its peers over the last two years, increasing by 16.3% annually
At $104.05 per share, UMB Financial trades at 1.1x forward P/B. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
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 5 Strong Momentum Stocks for this week. 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-micro-cap company Tecnoglass (+1,754% 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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