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. On that note, here are two growth stocks with significant upside potential and one whose momentum may slow.
One Growth Stock to Sell:
Centene (CNC)
One-Year Revenue Growth: +19.4%
Serving nearly 1 in 15 Americans through its government healthcare programs, Centene (NYSE: CNC) is a healthcare company that manages government-sponsored health insurance programs like Medicaid and Medicare for low-income and complex-needs populations.
Why Do We Think Twice About CNC?
- Customer growth was choppy over the past two years, suggesting that increasing competition is causing challenges in landing new contracts
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 16.3% annually while its revenue grew
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Centene’s stock price of $34.86 implies a valuation ratio of 11.5x forward P/E. To fully understand why you should be careful with CNC, check out our full research report (it’s free).
Two Growth Stocks to Watch:
Casella Waste Systems (CWST)
One-Year Revenue Growth: +18%
Starting with the founder picking up garbage with a pickup truck he purchased using savings from high school, Casella (NASDAQ: CWST) offers waste management services for businesses, residents, and the government.
Why Should CWST Be on Your Watchlist?
- Impressive 20.5% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Earnings per share grew by 16.2% annually over the last two years and trumped its peers
- CWST is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Casella Waste Systems is trading at $88.48 per share, or 64.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Houlihan Lokey (HLI)
One-Year Revenue Growth: +18%
Founded in 1972 and known for its expertise in complex financial situations, Houlihan Lokey (NYSE: HLI) is a global investment bank specializing in mergers and acquisitions, capital markets, financial restructurings, and valuation advisory services.
Why Should You Buy HLI?
- Annual revenue growth of 20% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 34.9% over the last two years outstripped its revenue performance
- Balance sheet strength has increased this cycle as its 34.3% annual tangible book value per share growth over the last two years was exceptional
At $139.50 per share, Houlihan Lokey trades at 16.7x forward P/E. Is now the right time to buy? See for yourself in our comprehensive 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.
Find out which 5 stocks it's flagging for this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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.
