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1 surging stock to target this week 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. On that note, here is one stock with lasting competitive advantages and two best left ignored.
Two momentum stocks to sell:
PagerDuty (PD)
One-month return: +14.2%
Born from the frustration of developers being woken up by unprioritized alerts, PagerDuty (NYSE:PD) is a digital operations management platform that helps organizations detect and respond to IT incidents, outages, and other critical issues in real-time.
Why Do We Think PD Will Underperform?
- Offerings struggled to generate meaningful interest as its average billings growth of 1.1% over the last year did not impress
- Estimated sales growth of 1.1% for the next 12 months implies demand will slow from its two-year trend
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 3.8 percentage points
At $17.24 per share, PagerDuty trades at 2.8x forward price-to-sales. Dive into our free research report to see why there are better opportunities than PD.
Boston Beer (SAM)
One-month return: +20.9%
Known for its flavorful beverages challenging the status quo, Boston Beer (NYSE:SAM) is a pioneer in craft brewing and a symbol of American innovation in the alcoholic beverage industry.
Why Do We Avoid SAM?
- Annual sales declines of 2.6% for the past three years show its products struggled to connect with the market
- Overall productivity fell over the last year as its plummeting sales were accompanied by a decline in its operating margin
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up
Boston Beer’s stock price of $198.33 implies a valuation ratio of 19x forward P/E. Check out our free in-depth research report to learn more about why SAM doesn’t pass our bar.
One momentum stock to buy:
Abercrombie and Fitch (ANF)
One-month return: +23.1%
Founded as an outdoor and sporting brand, Abercrombie & Fitch (NYSE:ANF) evolved to become a specialty retailer that sells its own brand of fashionable clothing to young adults.
Why Is ANF a Top Pick?
- Comparable store sales rose by 5% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
- Its collection of products is difficult to replicate at scale and leads to a best-in-class gross margin of 63.2%
- Performance over the past three years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
Abercrombie and Fitch is trading at $165.77 per share, or 12.9x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks we like even more
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.