Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. Keeping that in mind, here is one stock with lasting competitive advantages and two that may correct.
Two Momentum Stocks to Sell:
Nextdoor (NXDR)
One-Month Return: +25.3%
Helping residents figure out what's happening on their block in real time, Nextdoor (NYSE: KIND) is a social network that connects neighbors with each other and with local businesses.
Why Does NXDR Worry Us?
- White space opportunities may be dwindling as its growth in weekly active users averaged a weak 6.5%
- Persistent EBITDA margin losses suggest the business manages its expenses poorly
- Negative free cash flow raises questions about the return timeline for its investments
Nextdoor’s stock price of $2.16 implies a valuation ratio of 3.8x forward price-to-gross profit. Read our free research report to see why you should think twice about including NXDR in your portfolio.
Moderna (MRNA)
One-Month Return: +28.4%
Rising to global prominence during the COVID-19 pandemic with one of the first effective vaccines, Moderna (NASDAQ: MRNA) develops messenger RNA (mRNA) medicines that direct the body's cells to produce proteins with therapeutic or preventive benefits for various diseases.
Why Are We Out on MRNA?
- Sales tumbled by 50.5% annually over the last two years, showing market trends are working against its favor during this cycle
- Free cash flow margin dropped by 215.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $31.02 per share, Moderna trades at 7x forward price-to-sales. Dive into our free research report to see why there are better opportunities than MRNA.
One Momentum Stock to Buy:
DoorDash (DASH)
One-Month Return: +12.3%
Founded by Stanford students with the intent to build “the local, on-demand FedEx", DoorDash (NYSE: DASH) operates an on-demand food delivery platform.
Why Should You Buy DASH?
- Orders have grown by 20% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 1,009% outpaced its revenue gains
- Free cash flow margin grew by 12.6 percentage points over the last few years, giving the company more chips to play with
DoorDash is trading at $230.87 per share, or 29.7x forward EV/EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
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 5 Growth Stocks for this month. 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 Comfort Systems (+782% 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.
