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. That said, here are two growth stocks with significant upside potential and one whose momentum may slow.
One Growth Stock to Sell:
SoundHound AI (SOUN)
One-Year Revenue Growth: +121%
Born from the idea that machines should understand human speech as naturally as people do, SoundHound AI (NASDAQ:SOUN) develops voice recognition and conversational intelligence technology that enables businesses to integrate voice assistants into their products and services.
Why Do We Think Twice About SOUN?
- Sky-high servicing costs result in an inferior gross margin of 39.7% that must be offset through increased usage
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
SoundHound AI’s stock price of $12.72 implies a valuation ratio of 24.4x forward price-to-sales. Dive into our free research report to see why there are better opportunities than SOUN.
Two Growth Stocks to Watch:
Roku (ROKU)
One-Year Revenue Growth: +16.6%
With a name meaning six in Japanese because it was the founder's sixth company that he started, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Why Is ROKU on Our Radar?
- Has the opportunity to boost monetization through new features and premium offerings as its total hours streamed have grown by 18.7% annually over the last two years
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 51.2% annually, topping its revenue gains
- Free cash flow margin increased by 14 percentage points over the last few years, giving the company more capital to invest or return to shareholders
At $100.11 per share, Roku trades at 28x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.
Rumble (RUM)
One-Year Revenue Growth: +21.2%
Founded in 2013 as a champion for content creator rights and free expression, Rumble (NASDAQ:RUM) is a video sharing platform that positions itself as a free speech alternative to mainstream platforms, offering creators more favorable revenue-sharing opportunities.
Why Are We Positive On RUM?
- Annual revenue growth of 85.5% over the past four years was outstanding, reflecting market share gains this cycle
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 202%
Rumble is trading at $7.15 per share, or 48.2x forward EV-to-EBITDA. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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