2 Growth Stocks with Explosive Upside and 1 to Think Twice About
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. That said, here are two growth stocks with significant upside potential and one that could be down big.
One-Year Revenue Growth: +30.1%
Having played a role in upgrading the energy solutions of Alcatraz Island, Ameresco (NYSE:AMRC) provides energy and renewable energy solutions for various sectors.
Why Do We Think AMRC Will Underperform?
Muted 6.1% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
Cash burn makes us question whether it can achieve sustainable long-term growth
Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $13.65 per share, Ameresco trades at 13x forward P/E. Dive into our free research report to see why there are better opportunities than AMRC.
One-Year Revenue Growth: +16.1%
Having been at the forefront of developing the standards for cellular connectivity for over four decades, Qualcomm (NASDAQ:QCOM) is a leading innovator and a fabless manufacturer of wireless technology chips used in smartphones, autos and internet of things appliances.
Why Are We Fans of QCOM?
Annual revenue growth of 11.3% over the last five years beat the sector average and underscores the unique value of its offerings
Strong free cash flow margin of 30.4% enables it to reinvest or return capital consistently
Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Qualcomm's stock price of $145.17 implies a valuation ratio of 12.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it's free.
One-Year Revenue Growth: +15.1%
With locations often featuring Western-inspired decor, Texas Roadhouse (NASDAQ:TXRH) is an American restaurant chain specializing in Southern-style cuisine and steaks.
Why Is TXRH a Good Business?
Rapid rollout of new restaurants to capitalize on market opportunities makes sense given its strong same-store sales performance
Same-store sales growth over the past two years shows it's successfully drawing diners into its restaurants
Stellar returns on capital showcase management's ability to surface highly profitable business ventures, and its rising returns show it's making even more lucrative bets
Texas Roadhouse is trading at $190 per share, or 26.8x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it's free.
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 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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.
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