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 facing an uphill battle.
One Growth Stock to Sell:
Capital One (COF)
One-Year Revenue Growth: +48.2%
Starting as a credit card company in 1988 before expanding into a full-service bank, Capital One (NYSE: COF) is a financial services company that offers credit cards, auto loans, banking services, and commercial lending to consumers and businesses.
Why Does COF Give Us Pause?
- Performance over the past five years shows its incremental sales were less profitable, as its 4.6% annual earnings per share growth trailed its revenue gains
- Scale is a double-edged sword because it limits the firm’s capital growth potential compared to its smaller competitors, as reflected in its below-average annual tangible book value per share increases of 1.4% for the last two years
- Below-average return on equity indicates management struggled to find compelling investment opportunities
Capital One is trading at $199.85 per share, or 9.3x forward P/E. To fully understand why you should be careful with COF, check out our full research report (it’s free).
Two Growth Stocks to Watch:
Nova (NVMI)
One-Year Revenue Growth: +21.3%
Headquartered in Israel, Nova (NASDAQ: NVMI) is a provider of quality control systems used in semiconductor manufacturing.
Why Do We Love NVMI?
- Annual revenue growth of 30.8% over the last two years was superb and indicates its market share increased during this cycle
- Excellent operating margin of 28.8% highlights the efficiency of its business model, and its rise over the last five years was fueled by some leverage on its fixed costs
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 30.9% annually
Nova’s stock price of $475.64 implies a valuation ratio of 40x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Gevo (GEVO)
One-Year Revenue Growth: +315%
Operating one of the largest dairy-based renewable natural gas facilities in the United States, Gevo (NASDAQ: GEVO) produces sustainable aviation fuel and other renewable hydrocarbon fuels from plant-based feedstocks like corn.
Why Could GEVO Be a Winner?
- Annual revenue growth of 19% over the last ten years was superb and indicates its market share increased during this cycle
- EBITDA margin improvement of 6,358.1 percentage points over the last five years demonstrates its ability to scale efficiently
At $1.48 per share, Gevo trades at 10.9x forward EV-to-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
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 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
