1 Momentum Industrials Stock Worth Investigating and 2 We Find Risky

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.

But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here is one stock with lasting competitive advantages and two that may correct.

Two Momentum Stocks to Sell:

nLIGHT (LASR)

One-Month Return: +29.4%

Founded by a former CEO and Harvard-educated entrepreneur Scott Keeneyn, nLIGHT (NASDAQ:LASR) offers semiconductor and fiber lasers to the industrial, aerospace & defense, and medical sectors.

Why Do We Avoid LASR?

1. 2.6% annual revenue growth over the last five years was slower than its industrials peers
2. Cash burn has widened over the last five years, making us question whether it can reliably generate shareholder value
3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

nLIGHT is trading at $56.84 per share, or 193.9x forward P/E. If you’re considering LASR for your portfolio, see our FREE research report to learn more.

Regal Rexnord (RRX)

One-Month Return: +38.2%

Headquartered in Milwaukee, Regal Rexnord (NYSE:RRX) provides power transmission and industrial automation products.

Why Are We Wary of RRX?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 2.6% annually
3. Low returns on capital reflect management’s struggle to allocate funds effectively, and its decreasing returns suggest its historical profit centers are aging

Regal Rexnord’s stock price of $215.64 implies a valuation ratio of 20x forward P/E. To fully understand why you should be careful with RRX, check out our full research report (it’s free).

One Momentum Stock to Watch:

Vicor (VICR)

One-Month Return: +9.6%

Founded by a researcher at the Massachusetts Institute of Technology, Vicor (NASDAQ:VICR) provides electrical power conversion and delivery products for a range of industries.

Why Is VICR on Our Radar?

1. Offerings are difficult to replicate at scale and result in a best-in-class gross margin of 49.8%
2. Earnings growth has beaten its peers over the last two years as its EPS has compounded at 48.1% annually
3. Free cash flow margin jumped by 28.1 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

At $168.00 per share, Vicor trades at 59x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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 5 Growth Stocks for this month. 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 Kadant (+351% five-year return). Find your next big winner with StockStory today.