Growth is oxygen. But when it evaporates, the consequences can be severe - ask anyone who bought Cisco in the Dot-Com Bubble or newer investors who lived through the 2020 to 2022 COVID cycle.
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. That said, here is one growth stock where the best is yet to come and two facing an uphill battle.
Two Growth Stocks to Sell:
The Pennant Group (PNTG)
One-Year Revenue Growth: +37.6%
Spun off from The Ensign Group in 2019 to focus on non-skilled nursing healthcare services, Pennant Group (NASDAQ:PNTG) operates home health, hospice, and senior living facilities across 13 western and midwestern states, serving patients of all ages including seniors.
Why Does PNTG Give Us Pause?
- Revenue base of $1.09 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Poor free cash flow margin of 2.4% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- High net-debt-to-EBITDA ratio of 6× could force the company to raise capital on unfavorable terms if market conditions deteriorate
At $40.45 per share, The Pennant Group trades at 26.6x forward P/E. Check out our free in-depth research report to learn more about why PNTG doesn’t pass our bar.
Flutter Entertainment (FLUT)
One-Year Revenue Growth: +15.2%
With its digital fingerprints on nearly every aspect of global gambling, from the Super Bowl bettor to the online poker aficionado, Flutter Entertainment (NASDAQ:FLUT) operates a portfolio of leading online sports betting and gaming brands including FanDuel, PokerStars, Paddy Power, and Sky Betting & Gaming.
Why Do We Steer Clear of FLUT?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 19.3% over the last five years was below our standards for the consumer discretionary sector
- Free cash flow margin is not anticipated to grow over the next year
- Rising returns on capital show management is making relatively better investments
Flutter Entertainment’s stock price of $85.88 implies a valuation ratio of 14.5x forward P/E. To fully understand why you should be careful with FLUT, check out our full research report (it’s free).
One Growth Stock to Watch:
Waters Corporation (WAT)
One-Year Revenue Growth: +52.5%
Founded in 1958 and pioneering innovations in laboratory analysis for over six decades, Waters (NYSE:WAT) develops and manufactures analytical instruments, software, and consumables for liquid chromatography, mass spectrometry, and thermal analysis used in scientific research and quality testing.
Why Are We Fans of WAT?
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 48.6%
- Solid free cash flow generation relative to most peers gives it a cushion and grants it various reinvestment opportunities
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
Waters Corporation is trading at $420.75 per share, or 27.3x forward P/E. Is now the right time to buy? See for yourself in our in-depth 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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.