2 Growth Stocks to Add to Your Roster and 1 Facing Headwinds

Growth boosts valuation multiples, but it doesn’t always last forever. Companies that cannot maintain it are often penalized with large declines in market value, a lesson ingrained in investors who lost money in tech stocks during 2022.

The risks that can come from buying these assets is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here are two growth stocks with significant upside potential and one that could be down big.

One Growth Stock to Sell:

RXO (RXO)

One-Year Revenue Growth: +46.4%

With access to millions of trucks, RXO (NYSE:RXO) offers full-truckload, less-than-truckload, and last-mile deliveries.

Why Are We Wary of RXO?

1. Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 5.4 percentage points
2. Earnings per share fell by 61.7% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
3. Low returns on capital reflect management’s struggle to allocate funds effectively

RXO’s stock price of $14.88 implies a valuation ratio of 55.2x forward P/E. If you’re considering RXO for your portfolio, see our FREE research report to learn more.

Two Growth Stocks to Watch:

Sprouts (SFM)

One-Year Revenue Growth: +16.8%

Playing on the secular trend of healthier living, Sprouts Farmers Market (NASDAQ:SFM) is a grocery store chain emphasizing natural and organic products.

Why Do We Watch SFM?

1. Aggressive strategy of rolling out new stores to gobble up whitespace is prudent given its same-store sales growth
2. Same-store sales growth averaged 7.5% over the past two years, showing it’s bringing new and repeat shoppers into its stores
3. Market share is on track to rise over the next 12 months as its 11.7% projected revenue growth implies demand will accelerate from its six-year trend

Sprouts is trading at $144.40 per share, or 26.8x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Fidelis Insurance (FIHL)

One-Year Revenue Growth: +21.2%

Founded in Bermuda in 2014 and designed to adapt nimbly to evolving market conditions, Fidelis Insurance (NYSE:FIHL) is a global specialty insurer and reinsurer that provides customized coverage across property, specialty, and bespoke risk solutions.

Why Could FIHL Be a Winner?

1. Net premiums earned expanded by 20.6% annually over the last two years, demonstrating exceptional market penetration this cycle
2. Projected revenue growth of 10.5% for the next 12 months suggests its momentum from the last two years will persist
3. Capital generation for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust book value per share growth of 20.7%

At $17.01 per share, Fidelis Insurance trades at 0.7x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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-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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