2 Growth Stocks with All-Star Potential and 1 to Steer Clear Of

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.

Luckily for you, our job at StockStory is to help you avoid short-term fads by pointing you toward high-quality businesses that can generate sustainable long-term growth. That said, here are two growth stocks with significant upside potential and one that could be down big.

One Growth Stock to Sell:

ACV Auctions (ACVA)

One-Year Revenue Growth: +32.9%

Founded in 2014, ACV Auctions (NASDAQ:ACVA) is an online auction marketplace for car dealers and wholesalers to buy and sell used cars.

Why Does ACVA Give Us Pause?

1. Gross margin of 25.1% is below its competitors, leaving less money to invest in areas like marketing and R&D
2. High marketing expenses suggest it needs to spend heavily on new customer acquisition to sustain momentum
3. Poor free cash flow margin of 0.3% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends

ACV Auctions is trading at $15.65 per share, or 29.3x forward EV/EBITDA. Check out our free in-depth research report to learn more about why ACVA doesn’t pass our bar.

Two Growth Stocks to Watch:

Dynatrace (DT)

One-Year Revenue Growth: +18.7%

Founded in Austria in 2005, Dynatrace (NYSE:DT) provides companies with software that allows them to monitor the performance of their full technology stack, from software applications to the infrastructure they run on.

Why Are We Fans of DT?

1. Customers view its software as mission-critical to their operations as its ARR has averaged 17.6% growth over the last year
2. Superior software functionality and low servicing costs lead to a stellar gross margin of 81.9%
3. DT is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

At $54.30 per share, Dynatrace trades at 8.5x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

Sea (SE)

One-Year Revenue Growth: +30.2%

Founded in 2009 and a publicly traded company since 2017, Sea (NYSE:SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.

Why Should You Buy SE?

1. Has the opportunity to boost monetization through new features and premium offerings as its paying users have grown by 10.2% annually over the last two years
2. Platform’s growing usage and its ability to increase user spending by 11.7% annually showcases its high switching costs
3. Free cash flow margin grew by 27.3 percentage points over the last few years, giving the company more chips to play with

Sea’s stock price of $153.96 implies a valuation ratio of 40.6x forward EV/EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our 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 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