The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. Keeping that in mind, here is one stock with lasting competitive advantages and two best left ignored.
Two Momentum Stocks to Sell:
Tandem Diabetes (TNDM)
One-Month Return: +14.6%
With technology that automatically adjusts insulin delivery based on continuous glucose monitoring data, Tandem Diabetes Care (NASDAQ: TNDM) develops and manufactures automated insulin delivery systems that help people with diabetes manage their blood glucose levels.
Why Do We Think TNDM Will Underperform?
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 18.5% annually
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes
Tandem Diabetes is trading at $21.59 per share, or 26.7x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than TNDM.
ProPetro (PUMP)
One-Month Return: +20.8%
Operating exclusively in the Permian Basin—one of America's most prolific oil-producing regions—ProPetro (NYSE: PUMP) provides hydraulic fracturing services that pump high-pressure fluid and sand into oil wells to release trapped hydrocarbons.
Why Is PUMP Risky?
- Muted 10% annual revenue growth over the last five years shows its demand lagged behind its energy upstream and integrated energy peers
- Modest revenue base of $1.27 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- High extraction costs and unfavorable asset economics are reflected in its low gross margin of 27.5%
At $14.51 per share, ProPetro trades at 7.8x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why PUMP doesn’t pass our bar.
One Momentum Stock to Buy:
Matador Resources (MTDR)
One-Month Return: +19.8%
Operating primarily in the Delaware Basin where multiple oil-bearing layers lie stacked thousands of feet deep, Matador Resources (NYSE: MTDR) explores for, drills, and produces oil and natural gas from underground rock formations in New Mexico and Texas.
Why Is MTDR a Top Pick?
- Impressive 26.7% annual revenue growth over the last ten years indicates it’s winning market share this cycle
- Highly-profitable operating model results in strong unit economics and a best-in-class gross margin of 82.5%
- Strong free cash flow margin of 23.8% enables it to reinvest or return capital consistently
Matador Resources’s stock price of $56.78 implies a valuation ratio of 12.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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 Kadant (+351% five-year return). Find your next big winner with StockStory today.
