Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here are two stocks with the fundamentals to back up their performance and one best left ignored.
One Momentum Stock to Sell:
Moderna (MRNA)
One-Month Return: +2.5%
Rising to global prominence during the COVID-19 pandemic with one of the first effective vaccines, Moderna (NASDAQ: MRNA) develops messenger RNA (mRNA) medicines that direct the body's cells to produce proteins with therapeutic or preventive benefits for various diseases.
Why Do We Pass on MRNA?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 46.7% annually over the last two years
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 30.2% annually while its revenue grew
- Free cash flow margin dropped by 178.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Moderna’s stock price of $51.55 implies a valuation ratio of 10.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than MRNA.
Two Momentum Stocks to Watch:
Expedia (EXPE)
One-Month Return: +25.8%
Originally founded as a part of Microsoft, Expedia (NASDAQ: EXPE) is one of the world’s leading online travel agencies.
Why Are We Positive On EXPE?
- Platform is difficult to replicate at scale and results in a best-in-class gross margin of 89.8%
- Disciplined cost controls and effective management resulted in a strong two-year EBITDA margin of 22.6%, and it turbocharged its profits by achieving some fixed cost leverage
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 33% exceeded its revenue gains over the last three years
At $237.13 per share, Expedia trades at 7.9x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Dell (DELL)
One-Month Return: +34.2%
Founded by Michael Dell in his University of Texas dorm room in 1984 with just $1,000, Dell Technologies (NYSE: DELL) provides hardware, software, and services that help organizations build their IT infrastructure, manage cloud environments, and enable digital transformation.
Why Will DELL Outperform?
- Annual revenue growth of 13.3% over the last two years was superb and indicates its market share increased during this cycle
- Share repurchases over the last two years enabled its annual earnings per share growth of 20.5% to outpace its revenue gains
- Rising returns on capital show management is finding more attractive investment opportunities
Dell is trading at $159.92 per share, or 12.2x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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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.
