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. Keeping that in mind, here is one growth stock expanding its competitive advantage and two that could be down big.
Two Growth Stocks to Sell:
AAR (AIR)
One-Year Revenue Growth: +19.9%
The first third-party MRO approved by the FAA for Safety Management System Requirements, AAR (NYSE:AIR) is a provider of aircraft maintenance services
Why Is AIR Not Exciting?
- Annual revenue growth of 6.1% over the last five years was below our standards for the industrials sector
- Free cash flow margin shrank by 5.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Underwhelming 7% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam
AAR’s stock price of $72.99 implies a valuation ratio of 16.2x forward P/E. To fully understand why you should be careful with AIR, check out our full research report (it’s free).
Option Care Health (OPCH)
One-Year Revenue Growth: +17.1%
With a nationwide network of 177 locations serving 43 states and a team of over 4,500 clinicians, Option Care Health (NASDAQ:OPCH) is the largest independent provider of home and alternate site infusion services, delivering medications and clinical support to patients across the United States.
Why Does OPCH Worry Us?
At $29.67 per share, Option Care Health trades at 15.8x forward P/E. Dive into our free research report to see why there are better opportunities than OPCH.
One Growth Stock to Buy:
KLA Corporation (KLAC)
One-Year Revenue Growth: +23.9%
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
Why Is KLAC a Top Pick?
- Market share has increased this cycle as its 15.9% annual revenue growth over the last five years was exceptional
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 37%, and its operating leverage amplified its profits over the last five years
- KLAC 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
KLA Corporation is trading at $885.40 per share, or 26.8x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free.
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