Growth is a hallmark of all great companies, but the laws of gravity eventually take hold. Those who rode the COVID boom and ensuing tech selloff in 2022 will surely remember that the market’s punishment can be swift and severe when trajectories fall.
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. Keeping that in mind, here is one growth stock with significant upside potential and two that could be down big.
Two growth stocks to sell:
Penguin Solutions (PENG)
One-year revenue growth: +26.5%
Based in the US, Penguin Solutions (NASDAQ: PENG) is a diversified semiconductor company offering memory, digital, and LED products.
Why Does PENG Give Us Pause?
- Muted 2.9% annual revenue growth over the last five years shows its demand lagged behind its semiconductor peers
- Gross margin of 28.2% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Cash burn makes us question whether it can achieve sustainable long-term growth
Penguin Solutions’s stock price of $47.75 implies a valuation ratio of 11.7x forward P/E. If you’re considering PENG for your portfolio, see our FREE research report to learn more.
Columbus McKinnon (CMCO)
One-year revenue growth: +80.7%
With 19 different brands across the globe, Columbus McKinnon (NASDAQ: CMCO) offers material handling equipment for the construction, manufacturing, and transportation industries.
Why Do We Think Twice About CMCO?
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 14% annually while its revenue grew
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 11.4 percentage points
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Columbus McKinnon is trading at $18.60 per share, or 8.1x forward P/E. Read our free research report to see why you should think twice about including CMCO in your portfolio.
One growth stock to watch:
Medpace (MEDP)
One-year revenue growth: +20.4%
Founded in 1992 as a scientifically-driven alternative to traditional contract research organizations, Medpace (NASDAQ: MEDP) provides outsourced clinical trial management and research services to help pharmaceutical, biotechnology, and medical device companies develop new treatments.
Why Do We Watch MEDP?
- Average organic revenue growth of 18.7% over the past two years demonstrates its ability to expand independently without relying on acquisitions
- Share buybacks catapulted its annual earnings per share growth to 30%, which outperformed its revenue gains over the last five years
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute
At $661.50 per share, Medpace trades at 34.2x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks we like even more
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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.
