The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to new product launches, positive news, or even a dedicated social media following.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. All that said, here is one stock with the fundamentals to back up its performance and two not so much.
Two Momentum Stocks to Sell:
Chegg (CHGG)
One-Month Return: +11.6%
Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.
Why Should You Dump CHGG?
- Value proposition isn’t resonating strongly as its services subscribers averaged 13.4% drops over the last two years
- Overall productivity fell over the last few years as its plummeting sales were accompanied by a decline in its EBITDA margin
- Earnings per share decreased by more than its revenue over the last three years, showing each sale was less profitable
Chegg is trading at $1.35 per share, or 2.3x forward EV/EBITDA. To fully understand why you should be careful with CHGG, check out our full research report (it’s free).
MYR Group (MYRG)
One-Month Return: +12.3%
Constructing electrical and phone lines in the American Midwest dating back to the 1890s, MYR Group (NASDAQ:MYRG) is a specialty contractor in the electrical construction industry.
Why Is MYRG Risky?
- New orders were hard to come by as its backlog was flat over the past two years
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 34.5% annually while its revenue grew
- Waning returns on capital imply its previous profit engines are losing steam
At $182 per share, MYR Group trades at 29.2x forward P/E. Check out our free in-depth research report to learn more about why MYRG doesn’t pass our bar.
One Momentum Stock to Buy:
Coinbase (COIN)
One-Month Return: +36.1%
Widely regarded as the face of crypto, Coinbase (NASDAQ:COIN) is a blockchain infrastructure company updating the financial system with its trading, staking, stablecoin, and other payment solutions.
Why Will COIN Beat the Market?
- 58.2% annual increases in its average revenue per user over the last two years show its platform is resonating with power users
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 64.5% over the last two years outstripped its revenue performance
- Robust free cash flow margin of 25.9% gives it many options for capital deployment, and its expanding margin gives it even more flexibility
Coinbase’s stock price of $352.25 implies a valuation ratio of 27.5x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% 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