The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
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 not so much.
Two Momentum Stocks to Sell:
Western Digital (WDC)
One-Month Return: +4.8%
Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.
Why Do We Think WDC Will Underperform?
- Sales tumbled by 10.7% annually over the last five years, showing market trends are working against its favor during this cycle
- Negative 7.7% gross margin means it loses money on every sale and must pivot or scale quickly to survive
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its decreasing returns suggest its historical profit centers are aging
Western Digital is trading at $80.22 per share, or 14.3x forward P/E. If you’re considering WDC for your portfolio, see our FREE research report to learn more.
NeoGenomics (NEO)
One-Month Return: +70.5%
Operating a network of CAP-accredited and CLIA-certified laboratories across the United States and United Kingdom, NeoGenomics (NASDAQ: NEO) provides specialized cancer diagnostic testing services, including genetic analysis, molecular testing, and pathology consultation for oncologists and healthcare providers.
Why Are We Out on NEO?
- Smaller revenue base of $689.2 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Negative returns on capital show management lost money while trying to expand the business, and its shrinking returns suggest its past profit sources are losing steam
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
NeoGenomics’s stock price of $8.80 implies a valuation ratio of 36.6x forward P/E. To fully understand why you should be careful with NEO, check out our full research report (it’s free).
One Momentum Stock to Watch:
Upwork (UPWK)
One-Month Return: +30.7%
Formed through the 2013 merger of Elance and oDesk, Upwork (NASDAQ: UPWK) is an online platform where businesses and independent professionals connect to get work done.
Why Do We Like UPWK?
- Customer spending is rising as the company has focused on monetization over the last two years, leading to 8.9% annual growth in its average revenue per customer
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 166% over the last three years outstripped its revenue performance
- Free cash flow margin grew by 31.3 percentage points over the last few years, giving the company more chips to play with
At $15.36 per share, Upwork trades at 10.6x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% 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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