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Growth is oxygen. But when it evaporates, the consequences can be extreme - ask anyone who bought Cisco in the Dot-Com Bubble (Nvidia?) or newer investors who lived through the 2020 to 2022 COVID cycle.

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 are two growth stocks with significant upside potential and one climbing an uphill battle.

One Growth Stock to Sell:

Mission Produce (AVO)

One-Year Revenue Growth: +31.1%

Founded in 1983 in California, Mission Produce (NASDAQ:AVO) grows, packages, and distributes avocados.

Why Do We Avoid AVO?

1. Modest revenue base of $1.31 billion gives it less fixed cost leverage and fewer distribution channels than larger companies

2. Gross margin of 11.2% is an output of its commoditized products

3. Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its shrinking returns suggest its past profit sources are losing steam

Mission Produce is trading at $10.16 per share, or 9.1x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why AVO doesn’t pass our bar.

Two Growth Stocks to Buy:

Palantir (PLTR)

One-Year Revenue Growth: +33.5%

Started by Peter Thiel after seeing US defence agencies struggle in the aftermath of the 2001 terrorist attacks, Palantir (NYSE:PLTR) offers software as a service platform that helps government agencies and large enterprises use data to make better decisions.

Why Will PLTR Outperform?

1. Billings growth has averaged 38.6% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases

2. User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs

3. PLTR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

At $119.38 per share, Palantir trades at 73.3x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

HEICO (HEI)

One-Year Revenue Growth: +23.1%

Founded in 1957, HEICO (NYSE:HEI) manufactures and services aerospace and electronic components for commercial aviation, defense, space, and other industries.

Why Are We Backing HEI?

1. Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 9.6% over the past two years

2. Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 24.9% annually

3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends