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.
Deciphering which businesses can sustain their high growth rates is a challenge for even the most seasoned professionals, which is why we started StockStory. That said, here are two growth stocks where the best is yet to come and one that could be down big.
One Growth Stock to Sell:
First Advantage (FA)
One-Year Revenue Growth: +83%
Processing approximately 100 million background checks annually across more than 200 countries and territories, First Advantage (NASDAQ: FA) provides employment background screening, identity verification, and compliance solutions to help companies manage hiring risks.
Why Does FA Give Us Pause?
- Earnings per share were flat over the last four years and fell short of the peer group average
- Free cash flow margin shrank by 8.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Underwhelming 0.7% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam
At $11.06 per share, First Advantage trades at 9.4x forward P/E. Read our free research report to see why you should think twice about including FA in your portfolio.
Two Growth Stocks to Buy:
Vita Coco (COCO)
One-Year Revenue Growth: +18.2%
Founded in 2004 followed by a 2021 IPO, The Vita Coco Company (NASDAQ: COCO) offers coconut water products that are a natural way to quench thirst.
Why Should You Buy COCO?
- Products are flying off the shelves as its unit sales averaged 9.9% growth over the past two years
- Earnings growth has massively outpaced its peers over the last three years as its EPS has compounded at 70.9% annually
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its returns are growing as it capitalizes on even better market opportunities
Vita Coco’s stock price of $57.93 implies a valuation ratio of 35.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Charles Schwab (SCHW)
One-Year Revenue Growth: +22%
Founded in 1971 as a disruptive force challenging Wall Street's high fees and limited access, Charles Schwab (NYSE: SCHW) is a wealth management and brokerage firm that provides investment services, banking, and financial advice to individual investors and independent advisors.
Why Will SCHW Outperform?
- Annual revenue growth of 15.4% over the past five years was outstanding, reflecting market share gains this cycle
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
Charles Schwab is trading at $91.28 per share, or 15.8x forward P/E. Is now a good time to buy? See for yourself in our comprehensive 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
