Growth boosts valuation multiples, but it doesn’t always last forever. Companies that cannot maintain it are often penalized with large declines in market value, a lesson ingrained in investors who lost money in tech stocks during 2022.
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 is one growth stock with significant upside potential and two that could be down big.
Two Growth Stocks to Sell:
Asure Software (ASUR)
One-Year Revenue Growth: +17.3%
Operating in the often-overlooked smaller metropolitan markets where HR expertise can be scarce, Asure Software (NASDAQ: ASUR) provides cloud-based human capital management software and services that help small and medium-sized businesses manage payroll, taxes, time tracking, and HR compliance.
Why Are We Wary of ASUR?
- Offerings struggled to generate meaningful interest as its average billings growth of 14.2% over the last year did not impress
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
- Poor free cash flow margin of 5.5% for the last year limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
Asure Software’s stock price of $8.61 implies a valuation ratio of 1.5x forward price-to-sales. If you’re considering ASUR for your portfolio, see our FREE research report to learn more.
RXO (RXO)
One-Year Revenue Growth: +26.2%
With access to millions of trucks, RXO (NYSE: RXO) offers full-truckload, less-than-truckload, and last-mile deliveries.
Why Do We Think RXO Will Underperform?
- Flat unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
- 6× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $16.03 per share, RXO trades at 31.3x forward EV-to-EBITDA. To fully understand why you should be careful with RXO, check out our full research report (it’s free).
One Growth Stock to Buy:
Construction Partners (ROAD)
One-Year Revenue Growth: +53.9%
Founded in 2001, Construction Partners (NASDAQ: ROAD) is a civil infrastructure company that builds and maintains roads, highways, and other infrastructure projects.
Why Will ROAD Beat the Market?
- Impressive 37.5% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 49.6% annually, topping its revenue gains
- Free cash flow margin grew by 7.8 percentage points over the last five years, giving the company more chips to play with
Construction Partners is trading at $117.79 per share, or 38.5x 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
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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.
