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 climbing an uphill battle.
Two Growth Stocks to Sell:
Zillow (ZG)
One-Year Revenue Growth: +15.2%
Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ: ZG) is the leading U.S. online real estate marketplace.
Why Should You Dump ZG?
- Products and services have few die-hard fans as sales have declined by 6.6% annually over the last five years
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $62.23 per share, Zillow trades at 31x forward P/E. Read our free research report to see why you should think twice about including ZG in your portfolio.
Phibro Animal Health (PAHC)
One-Year Revenue Growth: +17.6%
With a portfolio of approximately 800 product lines serving farmers and veterinarians in 90 countries, Phibro Animal Health (NASDAQ: PAHC) develops, manufactures, and markets health products for livestock and companion animals, including antibacterials, vaccines, nutritional supplements, and mineral additives.
Why Do We Think Twice About PAHC?
- Smaller revenue base of $1.4 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Low free cash flow margin of 1.2% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Phibro Animal Health’s stock price of $40.15 implies a valuation ratio of 13.8x forward P/E. To fully understand why you should be careful with PAHC, check out our full research report (it’s free).
One Growth Stock to Buy:
Construction Partners (ROAD)
One-Year Revenue Growth: +54.2%
Founded in 2001, Construction Partners (NASDAQ: ROAD) is a civil infrastructure company that builds and maintains roads, highways, and other infrastructure projects.
Why Will ROAD Beat the Market?
- Notable projected revenue growth of 22.4% for the next 12 months hints at market share gains
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 53.7% annually, topping its revenue gains
- Free cash flow margin expanded by 6.5 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Construction Partners is trading at $109.87 per share, or 39.7x 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
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
