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1 surging stock to research further and 2 we find risky
The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. On that note, here is one stock with the fundamentals to back up its performance and two that may correct.
Two momentum stocks to sell:
Sprinklr (CXM)
One-month return: +30.5%
With a proprietary AI engine processing 450 million data points daily across 30+ digital channels, Sprinklr (NYSE:CXM) provides cloud-based software that helps large enterprises manage customer experiences across social, messaging, chat, and voice channels.
Why Do We Pass on CXM?
- Products, pricing, or go-to-market strategy may need some adjustments as its 2.2% average billings growth over the last year was weak
- Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
Sprinklr is trading at $6.79 per share, or 1.8x forward price-to-sales. To fully understand why you should be careful with CXM, check out our full research report (it’s free).
Parsons (PSN)
One-month return: +22.4%
Delivering aerospace technology during the Cold War-era, Parsons (NYSE:PSN) offers engineering, construction, and cybersecurity solutions for the infrastructure and defense sectors.
Why Is PSN Risky?
- Sales pipeline suggests its future revenue growth may not meet our standards as its average backlog growth of 1.8% for the past two years was weak
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 1.7% annually
- Low returns on capital reflect management’s struggle to allocate funds effectively
Parsons’s stock price of $49.94 implies a valuation ratio of 14.7x forward P/E. Check out our free in-depth research report to learn more about why PSN doesn’t pass our bar.
One momentum stock to watch:
Range Resources (RRC)
One-month return: +44.6%
Focused almost entirely on the Marcellus Shale beneath Pennsylvania's forests and farmland, Range Resources (NYSE:RRC) drills for and produces natural gas, natural gas liquids, and oil from shale formations.
Why Do We Like RRC?
- Market share has increased this cycle as its 8.7% annual revenue growth over the last ten years was exceptional
- Economies of scale give it more fixed cost leverage than its smaller competitors
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $55.29 per share, Range Resources trades at 13.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-quality stocks for all market conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth 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.