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2 Growth Stocks to Add to Your Roster and 1 We Avoid
Growth is oxygen. But when it evaporates, the consequences can be severe - ask anyone who bought Cisco in the Dot-Com Bubble or newer investors who lived through the 2020 to 2022 COVID cycle.
Deciphering which businesses can sustain their high growth rates is a challenge for even the most seasoned professionals, which is why we started StockStory. That said, here are two growth stocks with significant upside potential and one that could be down big.
One Growth Stock to Sell:
Semrush (SEMR)
One-Year Revenue Growth: +19.9%
Born from the need to make sense of the complex digital marketing landscape, Semrush (NYSE:SEMR) is a software-as-a-service platform that helps companies improve their online visibility, analyze digital marketing efforts, and optimize content across search engines and social media.
Why Are We Wary of SEMR?
- Struggled to drive increased usage of its software, demonstrated by its subpar 106% net revenue retention rate
- Operating margin declined by 4.3 percentage points over the last year as it scaled
- Low free cash flow margin of 9.7% for the last year gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Semrush is trading at $11.90 per share, or 3.6x forward price-to-sales. Read our free research report to see why you should think twice about including SEMR in your portfolio.
Two Growth Stocks to Buy:
Reddit (RDDT)
One-Year Revenue Growth: +69.7%
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE:RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Why Are We Bullish on RDDT?
- Domestic Daily Active Visitors have grown by 32.3% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Earnings per share grew by 40.2% annually over the last three years, massively outpacing its peers
- Free cash flow margin expanded by 41.8 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends
At $229.70 per share, Reddit trades at 41x forward EV/EBITDA. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
Skyward Specialty Insurance (SKWD)
One-Year Revenue Growth: +22.3%
Founded in 2006 to serve markets where standard insurance coverage falls short, Skyward Specialty Insurance (NASDAQ:SKWD) provides customized commercial property, casualty, and health insurance solutions for underserved or specialized market niches.
Why Is SKWD a Top Pick?
- Net premiums earned expanded by 26.6% annually over the last two years, demonstrating exceptional market penetration this cycle
- Annual book value per share growth of 29.3% over the last two years was superb and indicates its capital strength increased during this cycle
- Expected book value per share growth of 23.6% for the next year suggests its capital position will strengthen considerably
Skyward Specialty Insurance’s stock price of $51.13 implies a valuation ratio of 2.2x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.