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. Keeping that in mind, here is one growth stock expanding its competitive advantage and two whose momentum may slow.
Two Growth Stocks to Sell:
Zillow (ZG)
One-Year Revenue Growth: +15.5%
Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ: ZG) is the leading U.S. online real estate marketplace.
Why Do We Avoid ZG?
- Annual revenue declines of 5% over the last five years indicate problems with its market positioning
- Poor free cash flow margin of 10.6% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Returns on capital are growing as management invests in more worthwhile ventures
At $40.63 per share, Zillow trades at 18.2x forward P/E. To fully understand why you should be careful with ZG, check out our full research report (it’s free).
Flutter Entertainment (FLUT)
One-Year Revenue Growth: +16.6%
With its digital fingerprints on nearly every aspect of global gambling, from the Super Bowl bettor to the online poker aficionado, Flutter Entertainment (NASDAQ: FLUT) operates a portfolio of leading online sports betting and gaming brands including FanDuel, PokerStars, Paddy Power, and Sky Betting & Gaming.
Why Should You Sell FLUT?
- The company has faced growth challenges as its 17.9% annual revenue increases over the last two years fell short of other consumer discretionary companies
- Subpar operating margin of 3% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Low free cash flow margin of 5.4% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Flutter Entertainment is trading at $105.50 per share, or 14.3x forward P/E. If you’re considering FLUT for your portfolio, see our FREE research report to learn more.
One Growth Stock to Buy:
Palantir Technologies (PLTR)
One-Year Revenue Growth: +56.2%
Named after the all-seeing stones in "Lord of the Rings," Palantir Technologies (NASDAQ: PLTR) develops software platforms that help government agencies and enterprises integrate, analyze, and operationalize their data for decision-making.
Why Is PLTR a Top Pick?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 59.5% over the last year
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
- PLTR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Palantir Technologies’s stock price of $148.52 implies a valuation ratio of 51.8x forward price-to-sales. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
