Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here is one stock with lasting competitive advantages and two that may correct.
Two Momentum Stocks to Sell:
Paylocity (PCTY)
One-Month Return: +26.9%
Operating in a field where companies traditionally juggled multiple disconnected systems, Paylocity (NASDAQ:PCTY) provides cloud-based human capital management and payroll software solutions that help businesses manage their workforce and HR processes.
Why Do We Think Twice About PCTY?
- Average ARR growth of 12.2% over the last year has disappointed, suggesting it’s had a hard time winning long-term deals and renewals
- Estimated sales growth of 6.7% for the next 12 months implies demand will slow from its two-year trend
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
At $150.38 per share, Paylocity trades at 4.3x forward price-to-sales. Check out our free in-depth research report to learn more about why PCTY doesn’t pass our bar.
RingCentral (RNG)
One-Month Return: +48.8%
Built on its proprietary Message Video Phone (MVP) platform that unifies multiple communication methods, RingCentral (NYSE:RNG) provides AI-driven cloud communications and collaboration solutions that enable businesses to connect through voice, video, messaging, and contact center services.
Why Is RNG Risky?
- Offerings struggled to generate meaningful interest as its average billings growth of 6.5% over the last year did not impress
- Estimated sales growth of 4.5% for the next 12 months is soft and implies weaker demand
- Operating margin expanded by 4 percentage points over the last year as it scaled and became more efficient
RingCentral’s stock price of $62.17 implies a valuation ratio of 2x forward price-to-sales. Read our free research report to see why you should think twice about including RNG in your portfolio.
One Momentum Stock to Watch:
MSA Safety (MSA)
One-Month Return: +13.8%
Founded in 1914 as Mine Safety Appliances to protect coal miners from dangerous gases, MSA Safety (NYSE:MSA) designs and manufactures advanced safety products that protect workers and facilities across industries including fire service, energy, construction, and manufacturing.
Why Are We Positive on MSA?
- Adjusted operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Share buybacks catapulted its annual earnings per share growth to 15.6%, which outperformed its revenue gains over the last five years
- Free cash flow margin jumped by 10.5 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
MSA Safety is trading at $194.24 per share, or 20.2x forward P/E. Is now a good time to buy? See for yourself 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.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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.