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2 Momentum Stocks to Research Further and 1 to Be Wary Of

TDOC Cover Image

The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to new product launches, positive news, or even a dedicated social media following.

While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. Keeping that in mind, here are two stocks we think live up to the hype and one not so much.

One Momentum Stock to Sell:

Teladoc (TDOC)

One-Month Return: +18.5%

Founded to help people in rural areas get online medical consultations, Teladoc Health (NYSE: TDOC) is a telemedicine platform that facilitates remote doctor’s visits.

Why Does TDOC Fall Short?

  1. Annual revenue growth of 6% over the last three years was below our standards for the consumer internet sector
  2. Decision to emphasize platform growth over monetization has contributed to 5.3% annual declines in its average revenue per user
  3. Projected sales decline of 1.3% for the next 12 months points to a tough demand environment ahead

Teladoc’s stock price of $8.32 implies a valuation ratio of 4.8x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than TDOC.

Two Momentum Stocks to Watch:

Planet Labs (PL)

One-Month Return: +15.9%

Pioneering the concept of "agile aerospace" with hundreds of small but powerful satellites, Planet Labs (NYSE: PL) operates the world's largest fleet of Earth observation satellites, capturing daily images of our planet to provide insights on deforestation, agriculture, and climate change.

Why Do We Like PL?

  1. Annual revenue growth of 21.3% over the past five years was outstanding, reflecting market share gains this cycle
  2. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 27% outpaced its revenue gains
  3. Historical investments are beginning to pay off as its returns on capital are growing

Planet Labs is trading at $6.19 per share, or 6.4x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.

Super Micro (SMCI)

One-Month Return: +12.7%

Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ: SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.

Why Do We Love SMCI?

  1. Market share has increased this cycle as its 81.1% annual revenue growth over the last two years was exceptional
  2. Earnings per share have massively outperformed its peers over the last five years, increasing by 23.2% annually
  3. Returns on capital are climbing as management makes more lucrative bets

At $49.24 per share, Super Micro trades at 15.9x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 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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