Growth is oxygen. But when it evaporates, the consequences can be severe - ask anyone who bought Cisco in the Dot-Com Bubble or newer investors who lived through the 2020 to 2022 COVID cycle.

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 expanding their competitive advantages and one whose momentum may slow.

One Growth Stock to Sell:

Herc (HRI)

One-Year Revenue Growth: +19.4%

Formerly a subsidiary of Hertz Corporation and with a logo that still bears some similarities to its former parent, Herc Holdings (NYSE: HRI) provides equipment rental and related services to a wide range of industries.

Why Is HRI Not Exciting?

1. Incremental sales over the last two years were much less profitable as its earnings per share fell by 15.2% annually while its revenue grew
2. 9.4 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
3. 6× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

Herc’s stock price of $138.82 implies a valuation ratio of 18.5x forward P/E. Check out our free in-depth research report to learn more about why HRI doesn’t pass our bar.

Two Growth Stocks to Buy:

Lam Research (LRCX)

One-Year Revenue Growth: +25.7%

Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ: LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.

Why Is LRCX a Top Pick?

1. Impressive 11.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Free cash flow margin jumped by 9.4 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
3. Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures

At $165 per share, Lam Research trades at 33.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.

GE Aerospace (GE)

One-Year Revenue Growth: +22%

One of the original 12 companies on the Dow Jones Industrial Average, General Electric (NYSE: GE) is a multinational conglomerate providing technologies for various sectors including aviation, power, renewable energy, and healthcare.

Why Are We Bullish on GE?

1. Annual revenue growth of 15.2% over the last two years was superb and indicates its market share increased during this cycle
2. Strong free cash flow margin of 19.4% enables it to reinvest or return capital consistently
3. Returns on capital are growing as management capitalizes on its market opportunities

GE Aerospace is trading at $305.40 per share, or 45.5x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .

High-Quality Stocks for All Market Conditions

Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.

Don’t let fear keep you from great opportunities and take a look at 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 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 Kadant (+351% 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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