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.
The risks that can come from buying these assets are precisely why we started StockStory — to isolate the long-term winners from the losers so you can invest with confidence. Keeping that in mind, here are two growth stocks with significant upside potential and one that could be down big.
One Growth Stock to Sell:
Herc (HRI)
One-Year Revenue Growth: +28.5%
Formerly a subsidiary of Hertz Corporation and with a logo that still bears some similarities to its former parent, Herc Holdings (NYSE: HRI) provides equipment rental and related services to a wide range of industries.
Why Is HRI Not Exciting?
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 7 percentage points
- Earnings per share fell by 30.3% annually over the last two years while its revenue grew, partly because it diluted shareholders
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Herc is trading at $145.96 per share, or 16.6x forward P/E. Check out our free in-depth research report to learn more about why HRI doesn’t pass our bar.
Two Growth Stocks to Buy:
American Superconductor (AMSC)
One-Year Revenue Growth: +34.3%
Founded in 1987, American Superconductor (NASDAQ: AMSC) has shifted from superconductor research to developing power systems, adapting to changing energy grid needs and naval technology requirements.
Why Is AMSC a Top Pick?
- Annual revenue growth of 43.3% over the past two years was outstanding, reflecting market share gains this cycle
- Free cash flow margin increased by 24.5 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- Historical investments are beginning to pay off as its returns on capital are growing
At $29.91 per share, American Superconductor trades at 25.5x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Omnicom Group (OMC)
One-Year Revenue Growth: +40.6%
With a vast network of creative agencies that helped craft some of the most memorable ad campaigns in history, Omnicom Group (NYSE: OMC) is a strategic holding company that provides advertising, marketing, and communications services to many of the world's largest companies.
What Makes OMC Stand Out?
- Annual revenue growth of 21.6% over the past two years was outstanding, reflecting market share gains this cycle
- Massive revenue base of $22.37 billion makes it a well-known name that influences purchasing decisions
- Free cash flow margin jumped by 5 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Omnicom Group’s stock price of $79.13 implies a valuation ratio of 7.9x forward P/E. Is now a good 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 Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
