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.
The risks that can come from buying these assets are precisely why we started StockStory — to isolate the long-term winners from the losers so you can invest with confidence. That said, here are two growth stocks with significant upside potential and one facing an uphill battle.
One Growth Stock to Sell:
Allegro MicroSystems (ALGM)
One-Year Revenue Growth: +24.2%
The result of a spinoff from Sanken in Japan, Allegro MicroSystems (NASDAQ: ALGM) is a designer of power management chips and distance sensors used in electric vehicles and data centers.
Why Does ALGM Give Us Pause?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Operating margin of 2% has deteriorated over the last five years, hampering its adaptability and competitive positioning
- Low free cash flow margin of 8.1% declined over the last five years as its investments ramped, giving it little breathing room
Allegro MicroSystems is trading at $35.50 per share, or 31.8x forward P/E. Read our free research report to see why you should think twice about including ALGM in your portfolio.
Two Growth Stocks to Watch:
Sanmina (SANM)
One-Year Revenue Growth: +58.6%
Founded in 1980, Sanmina (NASDAQ: SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.
Why Is SANM a Top Pick?
- Market share has increased this cycle as its 29.6% annual revenue growth over the last two years was exceptional
- Expected revenue growth of 17.5% for the next year suggests its market share will rise
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 41.3% exceeded its revenue gains over the last two years
At $187.38 per share, Sanmina trades at 14.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Old National Bank (ONB)
One-Year Revenue Growth: +35.5%
Tracing its roots back to 1834 when Andrew Jackson was president, Old National Bancorp (NASDAQ: ONB) is a bank holding company that provides commercial and consumer loans, deposit services, wealth management, and treasury solutions primarily throughout the Midwest region.
Why Does ONB Stand Out?
- Annual revenue growth of 24.8% over the last two years was superb and indicates its market share increased during this cycle
- Annual net interest income growth of 30.7% over the last five years was superb and indicates its market share increased during this cycle
- Productivity and efficiency ratio profits are expected to increase next year as some fixed cost leverage kicks in
Old National Bank’s stock price of $25.65 implies a valuation ratio of 1.1x forward P/B. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
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.
