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. On that note, here are three growth stocks whose momentum may slow and some other opportunities you should look into instead.
Marqeta (MQ)
One-Year Revenue Growth: +17.5%
Powering the cards behind innovative fintech services like Block's Cash App, Marqeta (NASDAQ: MQ) provides a cloud-based platform that allows businesses to create customized payment card programs and process card transactions.
Why Does MQ Worry Us?
- Software offerings aren’t resonating in this new AI paradigm as its revenue declined by 19% annually over the last two years
- Operating profits fell over the last year as its sales dropped and it struggled to adjust its fixed costs
- Low free cash flow margin of 9.6% for the last year gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
At $4.88 per share, Marqeta trades at 3.3x forward price-to-sales. To fully understand why you should be careful with MQ, check out our full research report (it’s free for active Edge members).
The Pennant Group (PNTG)
One-Year Revenue Growth: +30.6%
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 Are We Cautious About PNTG?
- Smaller revenue base of $798.9 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Poor free cash flow margin of 1.2% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Low returns on capital reflect management’s struggle to allocate funds effectively
The Pennant Group’s stock price of $24.05 implies a valuation ratio of 20.1x forward P/E. Read our free research report to see why you should think twice about including PNTG in your portfolio.
PAR Technology (PAR)
One-Year Revenue Growth: +45.7%
Originally founded in 1968 as a defense contractor for the U.S. government, PAR Technology (NYSE: PAR) provides cloud-based software, payment processing, and hardware solutions that help restaurants manage everything from point-of-sale to customer loyalty programs.
Why Do We Think Twice About PAR?
- Cash-burning history makes us doubt the long-term viability of its business model
- Push for growth has led to negative returns on capital, signaling value destruction
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
PAR Technology is trading at $36.70 per share, or 165.2x forward P/E. Dive into our free research report to see why there are better opportunities than PAR.
Stocks We Like More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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