Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. Keeping that in mind, here is one stock we think lives up to the hype and two not so much.
Two momentum stocks to sell:
nCino (NCNO)
One-month return: +26.3%
Born from the internal technology needs of a community bank in 2011, nCino (NASDAQ: NCNO) provides cloud-based software that helps financial institutions streamline client onboarding, loan origination, and account opening processes.
Why Is NCNO Not Exciting?
- Offerings struggled to generate meaningful interest as its average billings growth of 9.6% over the last year did not impress
- Estimated sales growth of 8% for the next 12 months implies demand will slow from its two-year trend
- Steep infrastructure costs and weaker unit economics for a software company are reflected in its low gross margin of 62.2%
nCino’s stock price of $22.67 implies a valuation ratio of 3.6x forward price-to-sales. If you’re considering NCNO for your portfolio, see our FREE research report to learn more.
Evolent Health (EVH)
One-month return: +23.2%
Founded in 2011 to transform how healthcare is delivered to patients with complex needs, Evolent Health (NYSE: EVH) provides specialty care management services and technology solutions that help health plans and providers deliver better care for patients with complex conditions.
Why Does EVH Fall Short?
- Underwhelming average lives on platform over the past two years imply it may need to invest in improvements to get back on track
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- High net-debt-to-EBITDA ratio of 7× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Evolent Health is trading at $4.34 per share, or 12.6x forward P/E. Check out our free in-depth research report to learn more about why EVH doesn’t pass our bar.
One momentum stock to watch:
Cadre (CDRE)
One-month return: +17.3%
Originally known as Safariland, Cadre (NYSE: CDRE) specializes in manufacturing and distributing safety and survivability equipment for first responders.
Why Could CDRE Be a Winner?
- Market share has increased this cycle as its 13.5% annual revenue growth over the last two years was exceptional
- Operating margin improvement of 6.7 percentage points over the last five years demonstrates its ability to scale efficiently
- Earnings per share have massively outperformed its peers over the last four years, increasing by 40.8% annually
At $29.96 per share, Cadre trades at 21.5x forward P/E. Is now a good time to buy? See for yourself in our comprehensive 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.
