Growth is a hallmark of all great companies, but the laws of gravity eventually take hold. Those who rode the COVID boom and ensuing tech selloff in 2022 will surely remember that the market’s punishment can be swift and severe when trajectories fall.
The risks that can come from buying these assets is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here are two growth stocks expanding their competitive advantages and one whose momentum may slow.
One Growth Stock to Sell:
The Pennant Group (PNTG)
One-Year Revenue Growth: +30.6%
Spun off from The Ensign Group in 2019 to focus on non-skilled nursing healthcare services, Pennant Group (NASDAQ:PNTG) operates home health, hospice, and senior living facilities across 13 western and midwestern states, serving patients of all ages including seniors.
Why Does PNTG Fall Short?
- Smaller revenue base of $842.2 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- ROIC of 6% reflects management’s challenges in identifying attractive investment opportunities
The Pennant Group’s stock price of $28.15 implies a valuation ratio of 22.7x forward P/E. Check out our free in-depth research report to learn more about why PNTG doesn’t pass our bar.
Two Growth Stocks to Watch:
Datadog (DDOG)
One-Year Revenue Growth: +26.6%
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ:DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Why Is DDOG a Good Business?
- ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
At $125.41 per share, Datadog trades at 12.1x forward price-to-sales. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Commvault (CVLT)
One-Year Revenue Growth: +22%
Born from the need to create ironclad protection in an increasingly dangerous digital world, Commvault (NASDAQ:CVLT) provides data protection and cyber resilience software that helps organizations secure, back up, and recover their data across on-premises, hybrid, and multi-cloud environments.
Why Do We Like CVLT?
- Billings growth has averaged 25.4% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Prominent and differentiated software results in a premier gross margin of 81.5%
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
Commvault is trading at $124.18 per share, or 4.6x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.