1 Surging Stock with Exciting Potential and 2 Facing Challenges
Each stock in this article is trading near its 52-week high. These elevated prices usually indicate some degree of investor confidence, business improvements, or favorable market conditions.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. On that note, here is one stock with lasting competitive advantages and two that may correct.
Two Stocks to Sell:
Okta (OKTA)
One-Month Return: +17.1%
Named after the meteorological measurement for cloud cover, Okta (NASDAQ:OKTA) provides cloud-based identity management solutions that help organizations securely connect their employees, partners, and customers to the right applications and services.
Why Are We Hesitant About OKTA?
- Underwhelming ARR growth of 11.8% over the last year suggests the company faced challenges in acquiring and retaining long-term customers
- Estimated sales growth of 9.8% for the next 12 months implies demand will slow from its two-year trend
- Operating margin expanded by 4.9 percentage points over the last year as it scaled and became more efficient
Okta’s stock price of $166.18 implies a valuation ratio of 9.2x forward price-to-sales. Check out our free in-depth research report to learn more about why OKTA doesn’t pass our bar.
Merit Medical Systems (MMSI)
One-Month Return: +6.5%
Founded in 1987 and now offering over 1,700 patented products across global markets, Merit Medical Systems (NASDAQ:MMSI) manufactures and markets specialized medical devices used in minimally invasive procedures for cardiology, radiology, oncology, critical care, and endoscopy.
Why Does MMSI Give Us Pause?
- Revenue base of $1.58 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Underwhelming 5.6% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $90.50 per share, Merit Medical Systems trades at 20.5x forward P/E. If you’re considering MMSI for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Chord Energy (CHRD)
One-Month Return: +2.8%
Holding the largest acreage position in the Williston Basin, Chord Energy (NASDAQ:CHRD) drills for and produces crude oil, natural gas liquids, and natural gas in North Dakota's Williston Basin.
Why Should You Buy CHRD?
- Annual revenue growth of 24.8% over the past ten years was outstanding, reflecting market share gains this cycle
- Large revenue base of $6.32 billion and strong customer awareness give it negotiating power with suppliers
- Strong free cash flow margin of 23.3% enables it to reinvest or return capital consistently
Chord Energy is trading at $144.28 per share, or 9.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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.