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 are precisely why we started StockStory — to isolate the long-term winners from the losers so you can invest with confidence. On that note, here are two growth stocks expanding their competitive advantages and one facing an uphill battle.
One Growth Stock to Sell:
Columbus McKinnon (CMCO)
One-Year Revenue Growth: +23.9%
With 19 different brands across the globe, Columbus McKinnon (NASDAQ: CMCO) offers material handling equipment for the construction, manufacturing, and transportation industries.
Why Do We Avoid CMCO?
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 16.9% annually
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 17.7 percentage points
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Columbus McKinnon is trading at $13.75 per share, or 7.6x forward P/E. If you’re considering CMCO for your portfolio, see our FREE research report to learn more.
Two Growth Stocks to Watch:
Take-Two (TTWO)
One-Year Revenue Growth: +19%
Best known for its Grand Theft Auto and NBA 2K franchises, Take Two (NASDAQ: TTWO) is one of the world’s largest video game publishers.
Why Is TTWO a Good Business?
- Exciting sales outlook for the upcoming 12 months calls for 26.3% growth, an acceleration from its three-year trend
- Earnings per share have massively outperformed its peers over the last three years, increasing by 38.1% annually
- Free cash flow margin jumped by 10.7 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $258.46 per share, Take-Two trades at 28.7x forward EV/EBITDA. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Jabil (JBL)
One-Year Revenue Growth: +17.8%
With manufacturing facilities spanning the globe from China to Mexico to the United States, Jabil (NYSE: JBL) provides electronics design, manufacturing, and supply chain solutions to companies across various industries, from healthcare to automotive to cloud computing.
Why Are We Fans of JBL?
- Enormous revenue base of $33.59 billion provides significant distribution advantages
- Share buybacks catapulted its annual earnings per share growth to 18.4%, which outperformed its revenue gains over the last five years
- ROIC punches in at 34.7%, illustrating management’s expertise in identifying profitable investments, and its returns are growing as it capitalizes on even better market opportunities
Jabil’s stock price of $338.97 implies a valuation ratio of 24x forward P/E. 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
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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.
