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 is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here is one growth stock expanding its competitive advantage and two that could be down big.

Two Growth Stocks to Sell:

Coinbase (COIN)

1-Year Revenue Growth: +111%

Regarded by many as the face of crypto, Coinbase (NASDAQ:COIN) is a digital exchange helping the world onboard into the blockchain ecosystem.

Why Do We Think Twice About COIN?

1. Annual sales declines of 5.7% for the past three years show its products and services struggled to connect with the market
2. Value proposition isn’t resonating strongly as its monthly transacting users averaged 2.8% drops over the last two years
3. Earnings per share decreased by more than its revenue over the last three years, showing each sale was less profitable

Coinbase is trading at $218.45 per share, or 19.2x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including COIN in your portfolio, it’s free.

iRhythm (IRTC)

1-Year Revenue Growth: +20.1%

Founded in 2006, iRhythm Technologies (NASDAQ:IRTC) develops and markets wearable cardiac monitoring devices, focusing on diagnosing and managing heart arrhythmias (irregular heartbeats).

Why Are We Cautious About IRTC?

1. Revenue growth over the past five years was nullified by the company’s new share issuances as its earnings per share fell by 7.5% annually
2. Cash-burning history makes us doubt the long-term viability of its business model
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

iRhythm’s stock price of $107.91 implies a valuation ratio of 64.7x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than IRTC.

One Growth Stock to Buy:

Remitly (RELY)

1-Year Revenue Growth: +33.9%

With Amazon founder Jeff Bezos as an early investor, Remitly (NASDAQ:RELY) is an online platform that enables consumers to safely and quickly send money globally.

Why Is RELY a Top Pick?

1. Active Customers have grown by 39.9% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
2. Additional sales over the last three years increased its profitability as the 88.9% annual growth in its earnings per share outpaced its revenue
3. Free cash flow margin expanded by 19.3 percentage points over the last four years, providing additional flexibility for investments and share buybacks/dividends

At $23.99 per share, Remitly trades at 25.3x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our full research report, it’s free.

Stocks We Like Even More

The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.

Get started by checking out 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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.