
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.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. On that note, here is one stock with the fundamentals to back up its performance and two best left ignored.
Two Momentum Stocks to Sell:
Udemy (UDMY)
1-Month Return: +15%
With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ:UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.
Why Does UDMY Give Us Pause?
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Customer spending has dipped by 1.8% on average as it focused on growing its buyers
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Estimated sales growth of 1% for the next 12 months implies demand will slow from its three-year trend
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Expensive marketing campaigns hurt its profitability and make us wonder what would happen if it let up on the gas
At $9.05 per share, Udemy trades at 18.4x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why UDMY doesn’t pass our bar .
Papa John's (PZZA)
1-Month Return: +22.6%
Founded by the eclectic John “Papa John” Schnatter, Papa John’s (NASDAQ:PZZA) is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.
Why Are We Wary of PZZA?
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Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
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Estimated sales growth of 1.9% for the next 12 months implies demand will slow from its five-year trend
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Free cash flow margin dropped by 3.8 percentage points over the last year, implying the company became more capital intensive as competition picked up
Papa John’s stock price of $47.36 implies a valuation ratio of 19.9x forward price-to-earnings. If you’re considering PZZA for your portfolio, see our FREE research report to learn more .
One Momentum Stock to Watch:
Anheuser-Busch (BUD)
1-Month Return: +25.7%
Born out of a complicated web of mergers and acquisitions, Anheuser-Busch InBev (NYSE:BUD) boasts a powerhouse beer portfolio of Budweiser, Stella Artois, Corona, and local favorites around the world.
Why Do We Like BUD?
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Customer loyalty and massive revenue base of $59.77 billion makes it a household name that influences purchasing decisions
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Unique products and pricing power are reflected in its top-tier gross margin of 54.6%
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Excellent operating margin of 24.9% highlights the efficiency of its business model, and its profits increased over the last year as it scaled
Anheuser-Busch is trading at $63.25 per share, or 8x forward EV-to-EBITDA. Is now the right time to buy? Find out in our full research report, it’s free .
Stocks We Like Even More
The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market - and we’re zeroing in on the stocks that could benefit immensely.
Take advantage of the rebound 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 .