Growth is a hallmark of all great companies, but the laws of gravity eventually take hold. Those who rode the COVID boom and ensuing tech selloff in 2022 will surely remember that the market’s punishment can be swift and severe when trajectories fall.
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. Keeping that in mind, here is one growth stock with significant upside potential and two climbing an uphill battle.
Two Growth Stocks to Sell:
Agilysys (AGYS)
One-Year Revenue Growth: +17.8%
With a tech stack that powers everything from check-in to checkout at some of the world's top hospitality venues, Agilysys (NASDAQ: AGYS) develops and provides cloud-based and on-premise software solutions for hotels, resorts, casinos, and restaurants to manage operations and enhance guest experiences.
Why Is AGYS Not Exciting?
- Annual revenue growth of 15.5% over the last five years was below our standards for the software sector
- High servicing costs result in a relatively inferior gross margin of 61.8% that must be offset through increased usage
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
At $115.56 per share, Agilysys trades at 10x forward price-to-sales. To fully understand why you should be careful with AGYS, check out our full research report (it’s free for active Edge members).
VSE Corporation (VSEC)
One-Year Revenue Growth: +17.7%
With roots dating back to 1959 and a strategic focus on extending the life of transportation assets, VSE Corporation (NASDAQ: VSEC) provides aftermarket parts distribution and maintenance, repair, and overhaul services for aircraft and vehicle fleets in commercial and government markets.
Why Does VSEC Worry Us?
- High input costs result in an inferior gross margin of 17.3% that must be offset through higher volumes
- Cash-burning history makes us doubt the long-term viability of its business model
- ROIC of 5.1% reflects management’s challenges in identifying attractive investment opportunities
VSE Corporation’s stock price of $181.29 implies a valuation ratio of 44.1x forward P/E. Dive into our free research report to see why there are better opportunities than VSEC.
One Growth Stock to Watch:
IonQ (IONQ)
One-Year Revenue Growth: +113%
Founded by quantum physics pioneers from the University of Maryland and Duke University in 2015, IonQ (NYSE: IONQ) develops quantum computers that process information using trapped ions to solve complex computational problems beyond the capabilities of traditional computers.
Why Are We Positive On IONQ?
- Annual revenue growth of 101% over the past two years was outstanding, reflecting market share gains this cycle
- Projected revenue growth of 116% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Adjusted operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
IonQ is trading at $46.70 per share, or 76.7x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
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-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.
