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. Keeping that in mind, here are two growth stocks expanding their competitive advantages and one facing an uphill battle.
One Growth Stock to Sell:
DraftKings (DKNG)
One-Year Revenue Growth: +15%
Getting its start in daily fantasy sports, DraftKings (NASDAQ: DKNG) is a digital sports entertainment and gaming company.
Why Are We Bearish on DKNG?
- 20.3% annual revenue growth over the last two years was slower than its consumer discretionary peers
- Persistent operating margin losses suggest the business manages its expenses poorly
- Poor free cash flow margin of 9.9% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
DraftKings is trading at $25.90 per share, or 21.3x forward P/E. To fully understand why you should be careful with DKNG, check out our full research report (it’s free).
Two Growth Stocks to Watch:
Coursera (COUR)
One-Year Revenue Growth: +22.7%
Founded by two Stanford University computer science professors, Coursera (NYSE: COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.
Why Do We Like COUR?
- Strong consumer demand for its platform drove 15.1% annual revenue growth over the last three years, outperforming sector peers
- Exciting sales outlook for the upcoming 12 months calls for 68% growth, an acceleration from its three-year trend
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 68% outpaced its revenue gains
At $6.03 per share, Coursera trades at 1.8x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Expand Energy (EXE)
One-Year Revenue Growth: +42.8%
Rebranded from Chesapeake Energy in 2024 after emerging from bankruptcy, Expand Energy (NASDAQ: EXE) produces natural gas, oil, and natural gas liquids from underground shale formations in Louisiana, Pennsylvania, Ohio, and West Virginia.
Why Is EXE a Top Pick?
- Annual revenue growth of 19.4% over the last five years was superb and indicates its market share increased during this cycle
- Enormous revenue base of $12.66 billion provides significant leverage in supplier negotiations
- EBITDA profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
Expand Energy’s stock price of $95.60 implies a valuation ratio of 11.9x forward P/E. Is now the right time to buy? Find out in our full 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 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
