Growth is oxygen. But when it evaporates, the consequences can be severe - ask anyone who bought Cisco in the Dot-Com Bubble or newer investors who lived through the 2020 to 2022 COVID cycle.
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. On that note, here is one growth stock with significant upside potential and two climbing an uphill battle.
Two Growth Stocks to Sell:
Kratos (KTOS)
One-Year Revenue Growth: +18.5%
Established with a commitment to supporting national security, Kratos (NASDAQ: KTOS) is a provider of advanced engineering, technology, and security solutions tailored for critical national security applications.
Why Is KTOS Not Exciting?
- Operating margin of 2.1% fell from an already low starting point over the last five years because it pursued growth instead of profits
- 8.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Underwhelming 1.3% return on capital reflects management’s difficulties in finding profitable growth opportunities
Kratos is trading at $87.64 per share, or 115.2x forward P/E. Dive into our free research report to see why there are better opportunities than KTOS.
Republic Bancorp (RBCAA)
One-Year Revenue Growth: +16.8%
With roots dating back to 1974 and operating across multiple states including Kentucky, Indiana, Florida, Ohio, and Tennessee, Republic Bancorp (NASDAQGS:RBCA.A) is a Kentucky-based financial holding company that operates a bank offering traditional banking, mortgage services, and specialized financial products.
Why Does RBCAA Worry Us?
- Muted 6% annual revenue growth over the last five years shows its demand lagged behind its banking peers
- Net interest income was flat over the last five years, indicating it’s failed to expand this cycle
- Estimated tangible book value per share growth of 7.4% for the next 12 months implies profitability will slow from its two-year trend
Republic Bancorp’s stock price of $68.47 implies a valuation ratio of 1.1x forward P/B. If you’re considering RBCAA for your portfolio, see our FREE research report to learn more.
One Growth Stock to Buy:
Pure Storage (PSTG)
One-Year Revenue Growth: +15.6%
Founded in 2009 as a pioneer in enterprise all-flash storage technology, Pure Storage (NYSE: PSTG) provides all-flash data storage hardware and software that helps organizations manage their data more efficiently across on-premises and cloud environments.
Why Is PSTG a Top Pick?
- ARR growth averaged 20.1% over the past two years, showing customers are willing to take multi-year bets on its offerings
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 61.7% annually, topping its revenue gains
- PSTG is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
At $61.27 per share, Pure Storage trades at 26.4x 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
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 for 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
