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. That said, here is one growth stock with significant upside potential and two facing an uphill battle.
Two Growth Stocks to Sell:
Seacoast Banking (SBCF)
One-Year Revenue Growth: +33.4%
Founded during the Florida land boom of 1926 and surviving the Great Depression, Seacoast Banking Corporation of Florida (NASDAQ: SBCF) is a financial holding company that provides commercial and retail banking, wealth management, and mortgage services throughout Florida.
Why Does SBCF Give Us Pause?
- Net interest margin of 3.5% is well below other banks, signaling its loans aren’t very profitable
- Performance over the past five years shows its incremental sales were less profitable as its earnings per share were flat
- Tangible book value per share tumbled by 1.5% annually over the last five years, showing banking sector trends are working against it during this cycle
Seacoast Banking is trading at $30 per share, or 1.2x forward P/B. Check out our free in-depth research report to learn more about why SBCF doesn’t pass our bar.
LendingTree (TREE)
One-Year Revenue Growth: +23.9%
Using the same comparison model that revolutionized travel booking, LendingTree (NASDAQ: TREE) operates an online platform that connects consumers with financial service providers across mortgages, personal loans, credit cards, insurance, and other financial products.
Why Are We Hesitant About TREE?
- High marketing expenses suggest it needs to spend heavily on new customer acquisition to sustain momentum
At $39.58 per share, LendingTree trades at 0.4x forward price-to-gross profit. Dive into our free research report to see why there are better opportunities than TREE.
One Growth Stock to Watch:
DigitalOcean (DOCN)
One-Year Revenue Growth: +17.6%
Built for simplicity in a world of complex cloud solutions, DigitalOcean (NYSE: DOCN) provides a simplified cloud computing platform that enables developers and small businesses to quickly deploy and scale applications.
Why Is DOCN on Our Radar?
- Billings growth has averaged 17.6% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Projected revenue growth of 30.7% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
DigitalOcean’s stock price of $177.13 implies a valuation ratio of 14.1x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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 (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
