1 Surging Stock with Competitive Advantages and 2 We Avoid

Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.

While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. Keeping that in mind, here is one stock with lasting competitive advantages and two best left ignored.

Two Momentum Stocks to Sell:

ThredUp (TDUP)

One-Month Return: +41.2%

Founded to revolutionize thrifting, ThredUp (NASDAQ:TDUP) is a leading online fashion resale marketplace offering a wide selection of gently-used clothing and accessories.

Why Do We Avoid TDUP?

1. Demand for its offerings was relatively low as its number of orders has underwhelmed
2. Historical operating margin losses point to an inefficient cost structure
3. Cash-burning history makes us doubt the long-term viability of its business model

At $10 per share, ThredUp trades at 95.5x forward EV-to-EBITDA. To fully understand why you should be careful with TDUP, check out our full research report (it’s free).

Grocery Outlet (GO)

One-Month Return: +39.7%

Due to its differentiated procurement and buying approach, Grocery Outlet (NASDAQ:GO) is a discount grocery store chain that offers substantial discounts on name-brand products.

Why Do We Think Twice About GO?

1. Operating margin of 1.4% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
2. Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its shrinking returns suggest its past profit sources are losing steam
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

Grocery Outlet’s stock price of $18.54 implies a valuation ratio of 22.7x forward P/E. If you’re considering GO for your portfolio, see our FREE research report to learn more.

One Momentum Stock to Watch:

The Trade Desk (TTD)

One-Month Return: -28.3%

Founded by former Microsoft engineers Jeff Green and Dave Pickles, The Trade Desk (NASDAQ:TTD) offers cloud-based software that uses data to help advertisers better plan, place, and target their online ads.

Why Could TTD Be a Winner?

1. Billings growth has averaged 24.2% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
2. User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
3. Healthy operating margin of 17.7% shows it’s a well-run company with efficient processes, and its profits increased over the last year as it scaled

The Trade Desk is trading at $54.05 per share, or 8.8x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at 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 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-micro-cap company Kadant (+351% 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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