Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.

However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. On that note, here is one stock with the fundamentals to back up its performance and two best left ignored.

Two Momentum Stocks to Sell:

8x8 (EGHT)

One-Month Return: +17.8%

Named after its founding year (1987) with "8x8" representing binary code for communications, 8x8 (NASDAQ: EGHT) provides cloud-based contact center and unified communications solutions that enable businesses to manage customer interactions and internal communications through a single platform.

Why Do We Think EGHT Will Underperform?

1. Products, pricing, or go-to-market strategy may need some adjustments as its 1.3% average billings growth over the last year was weak
2. Sales are projected to remain flat over the next 12 months as demand decelerates from its three-year trend
3. Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions

8x8’s stock price of $2.18 implies a valuation ratio of 0.4x forward price-to-sales. Dive into our free research report to see why there are better opportunities than EGHT.

NN (NNBR)

One-Month Return: -5%

Formerly known as Nuturn, NN (NASDAQ: NNBR) provides metal components, bearings, and plastic and rubber components to the automotive, aerospace, medical, and industrial sectors.

Why Are We Out on NNBR?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.6% annually over the last two years
2. Negative free cash flow raises questions about the return timeline for its investments
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

At $2.28 per share, NN trades at 66.9x forward P/E. To fully understand why you should be careful with NNBR, check out our full research report (it’s free).

One Momentum Stock to Buy:

Nextracker (NXT)

One-Month Return: +22%

With its technology playing a key role in the massive 1.2 gigawatt Noor Abu Dhabi solar farm project, Nextracker (NASDAQ: NXT) is a provider of solar tracker systems that help solar panels follow the sun.

Why Is NXT a Good Business?

1. Average backlog growth of 41.7% over the past two years shows it has a steady sales pipeline that will drive future orders
2. Free cash flow margin expanded by 13.7 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
3. Improving returns on capital reflect management’s ability to monetize investments

Nextracker is trading at $66.50 per share, or 17.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking 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 Comfort Systems (+782% 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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