Exciting developments are taking place for the stocks in this article.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. Keeping that in mind, here is one stock with lasting competitive advantages and two not so much.
Two Momentum Stocks to Sell:
Elastic (ESTC)
One-Month Return: +16%
Built on the powerful open-source Elasticsearch technology that powers search functionality for thousands of websites worldwide, Elastic (NYSE:ESTC) provides a search and AI platform that helps organizations find insights from their data, monitor applications, and protect against security threats.
Why Are We Cautious About ESTC?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 14% underwhelmed
- Efficient onboarding process gets customers to spend money faster and frees the company to focus on product enhancements
- Operating margin was unchanged over the last year, suggesting it failed to gain leverage on its fixed costs
Elastic is trading at $88.54 per share, or 4.6x forward price-to-sales. Read our free research report to see why you should think twice about including ESTC in your portfolio.
E.W. Scripps (SSP)
One-Month Return: -3.5%
Founded as a chain of daily newspapers, E.W. Scripps (NASDAQ:SSP) is a diversified media enterprise operating a range of local television stations, national networks, and digital media platforms.
Why Do We Pass on SSP?
- Flat sales over the last five years suggest it must innovate and find new ways to grow
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
- 9× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
E.W. Scripps’s stock price of $3.22 implies a valuation ratio of 330x forward P/E. To fully understand why you should be careful with SSP, check out our full research report (it’s free).
One Momentum Stock to Watch:
Coinbase (COIN)
One-Month Return: +20.3%
Widely regarded as the face of crypto, Coinbase (NASDAQ:COIN) is a blockchain infrastructure company updating the financial system with its trading, staking, stablecoin, and other payment solutions.
Why Should COIN Be on Your Watchlist?
- Prominent and differentiated platform results in a best-in-class gross margin of 85.7%
- Disciplined cost controls and effective management resulted in a strong two-year EBITDA margin of 38.1%, and its rise over the last few years was fueled by some leverage on its fixed costs
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $178.91 per share, Coinbase trades at 25.1x forward EV/EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.