Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here is one stock with lasting competitive advantages and two that may correct.
Two Momentum Stocks to Sell:
Impinj (PI)
One-Month Return: +35.8%
Founded by Caltech professor Carver Mead and one of his students Chris Diorio, Impinj (NASDAQ: PI) is a maker of radio-frequency identification (RFID) hardware and software.
Why Does PI Worry Us?
- Projected sales growth of 9.3% for the next 12 months suggests sluggish demand
- Poor expense management has led to operating margin losses
- Negative returns on capital show that some of its growth strategies have backfired
Impinj’s stock price of $147.25 implies a valuation ratio of 69.7x forward P/E. Dive into our free research report to see why there are better opportunities than PI.
NESR (NESR)
One-Month Return: +12%
Operating across 16 countries from Algeria to Indonesia, NESR (NASDAQ: NESR) provides oilfield services like hydraulic fracturing, cementing, and drilling to oil and gas companies.
Why Are We Cautious About NESR?
- Modest revenue base of $1.43 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- High extraction costs and unfavorable asset economics are reflected in its low gross margin of 12.7%
- Day-to-day expenses have swelled relative to revenue over the last five years as its EBITDA margin fell by 48.4 percentage points
At $26.01 per share, NESR trades at 14.9x forward P/E. To fully understand why you should be careful with NESR, check out our full research report (it’s free).
One Momentum Stock to Buy:
GitLab (GTLB)
One-Month Return: +4%
With its all-remote workforce pioneering a new approach to software development, GitLab (NASDAQ: GTLB) provides a single-application DevSecOps platform that helps development, operations, and security teams collaborate to build, secure, and deploy software faster.
Why Is GTLB a Good Business?
- Ability to secure long-term commitments with customers is evident in its 26.4% ARR growth over the last year
- Platform has decent utility and becomes more valuable over time, as seen in its 120% net revenue retention rate
- Superior software functionality and low servicing costs result in a best-in-class gross margin of 87.4%
GitLab is trading at $22.64 per share, or 3.4x forward price-to-sales. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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.
