1 Growth Stock Set to Flourishand 2 That Underwhelm

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.

Deciphering which businesses can sustain their high growth rates is a challenge for even the most seasoned professionals, which is why we started StockStory. Keeping that in mind, here is one growth stock where the best is yet to come and two climbing an uphill battle.

Two Growth Stocks to Sell:

Quanex (NX)

One-Year Revenue Growth: +43.8%

Starting in the seamless tube industry, Quanex (NYSE:NX) manufactures building products like window, door, kitchen, and bath cabinet components.

Why Does NX Worry Us?

1. Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 18.2 percentage points
2. Earnings per share fell by 8.5% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Quanex’s stock price of $16.50 implies a valuation ratio of 7.5x forward P/E. Dive into our free research report to see why there are better opportunities than NX.

Atlanticus Holdings (ATLC)

One-Year Revenue Growth: +22.2%

Using data analytics to serve the millions of Americans with less-than-perfect credit scores, Atlanticus Holdings (NASDAQ:ATLC) provides technology and services that help lenders offer credit products to consumers often overlooked by traditional financing providers.

Why Is ATLC Not Exciting?

1. Earnings per share have dipped by 6.2% annually over the past four years, which is concerning because stock prices follow EPS over the long term
2. 34× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

At $66.37 per share, Atlanticus Holdings trades at 8.8x forward P/E. To fully understand why you should be careful with ATLC, check out our full research report (it’s free).

One Growth Stock to Watch:

Inspire Medical Systems (INSP)

One-Year Revenue Growth: +16.8%

Offering an alternative for the millions who struggle with traditional CPAP machines, Inspire Medical Systems (NYSE:INSP) develops and sells an implantable neurostimulation device that treats obstructive sleep apnea by stimulating nerves to keep airways open during sleep.

Why Does INSP Catch Our Eye?

1. Steady expansion of new domestic medical centers reflects a push to reach more customers in underpenetrated markets
2. Earnings per share have massively outperformed its peers over the last five years, increasing by 21.4% annually
3. Free cash flow margin expanded by 26 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends

Inspire Medical Systems is trading at $95.02 per share, or 61.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in 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 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.