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.
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. That said, here are two growth stocks with significant upside potential and one that could be down big.
One Growth Stock to Sell:
The Real Brokerage (REAX)
One-Year Revenue Growth: +65.6%
Founded in Toronto, Canada in 2014, The Real Brokerage (NASDAQ:REAX) is a technology-driven real estate brokerage firm combining a tech-centric model with an agent-centric philosophy.
Why Are We Cautious About REAX?
- Suboptimal cost structure is highlighted by its history of operating margin losses
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 6.2% annually while its revenue grew
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
The Real Brokerage’s stock price of $3.64 implies a valuation ratio of 10.8x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why REAX doesn’t pass our bar.
Two Growth Stocks to Watch:
MACOM (MTSI)
One-Year Revenue Growth: +32.6%
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
Why Could MTSI Be a Winner?
- Annual revenue growth of 22.1% over the past two years was outstanding, reflecting market share gains this cycle
- Offerings are mission-critical for businesses and lead to a premier gross margin of 54.4%
- Earnings per share have massively outperformed its peers over the last five years, increasing by 29.1% annually
MACOM is trading at $157.66 per share, or 37.5x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
Perdoceo Education (PRDO)
One-Year Revenue Growth: +24.2%
Formerly known as Career Education Corporation, Perdoceo Education (NASDAQ:PRDO) is an educational services company that specializes in postsecondary education.
Why Is PRDO on Our Radar?
- Highly efficient business model is illustrated by its impressive 24.2% operating margin
- Robust free cash flow margin of 23.7% gives it many options for capital deployment
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
At $29.71 per share, Perdoceo Education trades at 37.5x forward EV-to-EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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