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. That said, here are two growth stocks where the best is yet to come and one that could be down big.
One Growth Stock to Sell:
MongoDB (MDB)
One-Year Revenue Growth: +23.6%
Named after "humongous database," reflecting its ability to handle massive data loads, MongoDB (NASDAQ:MDB) provides a flexible document-based database platform that helps developers build, deploy, and maintain modern applications more efficiently.
Why Do We Think Twice About MDB?
- Prolonged sales cycles signal certain parts of its software must be customized for its large enterprise clients, impeding customer growth
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 4 percentage points over the next year
MongoDB is trading at $441.11 per share, or 11.5x forward price-to-sales. Read our free research report to see why you should think twice about including MDB in your portfolio.
Two Growth Stocks to Buy:
Upstart (UPST)
One-Year Revenue Growth: +46.3%
Using over 2,500 data variables and trained on nearly 82 million repayment events, Upstart (NASDAQ:UPST) is an AI-powered lending platform that uses machine learning to help banks and credit unions more accurately assess borrower risk for personal loans, auto loans, and home equity lines of credit.
Why Will UPST Outperform?
- Loan originations on its platform are soaring as they averaged 54.3% growth over the last year, enabling the company to collect more fees and expand into new markets like credit cards.
- Notable projected revenue growth of 30.6% for the next 12 months hints at market share gains
- Free cash flow is expected to be positive next year, showing the company is at a key inflection point
At $30.73 per share, Upstart trades at 2x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
Carvana (CVNA)
One-Year Revenue Growth: +54%
Known for its glass tower car vending machines, Carvana (NYSE:CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.
Why Is CVNA a Top Pick?
- Retail Units Sold have increased by an average of 37.7% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Grip over its ecosystem is highlighted by its ability to grow engagement while increasing the average revenue per unit by 10.7% annually
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 43.6% outpaced its revenue gains
Carvana’s stock price of $70.70 implies a valuation ratio of 15.3x forward EV/EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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.