Growth boosts valuation multiples, but it doesn’t always last forever. Companies that cannot maintain it are often penalized with large declines in market value, a lesson ingrained in investors who lost money in tech stocks during 2022.
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. On that note, here is one growth stock expanding its competitive advantage and two facing an uphill battle.
Two Growth Stocks to Sell:
HA Sustainable Infrastructure Capital (HASI)
One-Year Revenue Growth: +24.1%
With a proprietary "CarbonCount" metric that quantifies the environmental impact of each dollar invested, HA Sustainable Infrastructure Capital (NYSE: HASI) is an investment firm that finances and develops climate-positive infrastructure projects across renewable energy, energy efficiency, and ecological restoration.
Why Does HASI Give Us Pause?
- Annual earnings per share growth of 9.7% underperformed its revenue over the last two years, showing its incremental sales were less profitable
- Underwhelming 5.8% return on equity reflects management’s difficulties in finding profitable growth opportunities
HA Sustainable Infrastructure Capital is trading at $41.41 per share, or 13.9x forward P/E. Check out our free in-depth research report to learn more about why HASI doesn’t pass our bar.
Nelnet (NNI)
One-Year Revenue Growth: +20.7%
Starting as a student loan servicer in the 1970s and evolving through the changing landscape of education finance, Nelnet (NYSE: NNI) provides student loan servicing, education technology, payment processing, and banking services while managing a portfolio of education loans.
Why Is NNI Not Exciting?
- Annual revenue growth of 5.5% over the last five years was below our standards for the financials sector
- Low return on equity reflects management’s struggle to allocate funds effectively
Nelnet’s stock price of $130.26 implies a valuation ratio of 2.7x forward price-to-sales. To fully understand why you should be careful with NNI, check out our full research report (it’s free).
One Growth Stock to Watch:
Acuity Brands (AYI)
One-Year Revenue Growth: +15.9%
One of the pioneers of smart lights, Acuity (NYSE: AYI) designs and manufactures light fixtures and building management systems used in various industries.
Why Could AYI Be a Winner?
- 9.1% annual revenue growth over the last two years surpassed the sector average as its offerings resonated with customers
- Offerings are mission-critical for businesses and result in a best-in-class gross margin of 45.1%
- Share repurchases over the last five years enabled its annual earnings per share growth of 17.8% to outpace its revenue gains
At $300.41 per share, Acuity Brands trades at 14.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
