Growth is a hallmark of all great companies, but the laws of gravity eventually take hold. Those who rode the COVID boom and ensuing tech selloff in 2022 will surely remember that the market’s punishment can be swift and severe when trajectories fall.
Deciphering which businesses can sustain their high growth rates is a challenge for even the most seasoned professionals, which is why we started StockStory. Keeping that in mind, here are three growth stocks facing an uphill battle and some other opportunities you should consider instead.
Aflac (AFL)
One-Year Revenue Growth: +24.9%
Known for its iconic duck mascot that has quacked "Aflac!" in commercials since 2000, Aflac (NYSE:AFL) provides supplemental health and life insurance policies that pay cash benefits directly to policyholders for expenses not covered by their primary insurance.
Why Do We Avoid AFL?
- 6.2% annual declines in net premiums earned for the past five years indicates policy sales struggled this cycle
- Projected book value per share decline of 4.8% for the next 12 months points to tough credit quality challenges ahead
- High debt-to-equity ratio of 1.9× shows the firm carries too much debt relative to shareholder equity, increasing bankruptcy risk
Aflac is trading at $121.82 per share, or 2.1x forward P/B. Read our free research report to see why you should think twice about including AFL in your portfolio.
Columbia Financial (CLBK)
One-Year Revenue Growth: +46.5%
Founded during the Roaring Twenties in 1926 and headquartered in Fair Lawn, New Jersey, Columbia Financial (NASDAQ:CLBK) operates federally chartered savings banks in New Jersey that offer traditional banking services including loans, deposits, and insurance products.
Why Do We Think CLBK Will Underperform?
- Net interest income was flat over the last five years, indicating it’s failed to expand this cycle
- Net interest margin of 2.1% is well below other banks, signaling its loans aren’t very profitable
- Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 3.8% annually
Columbia Financial’s stock price of $21.39 implies a valuation ratio of 1.8x forward P/B. To fully understand why you should be careful with CLBK, check out our full research report (it’s free).
Washington Trust Bancorp (WASH)
One-Year Revenue Growth: +15.6%
Founded in 1800 and operating as Rhode Island's oldest community bank, Washington Trust Bancorp (NASDAQ:WASH) is a regional bank holding company offering commercial banking, mortgage lending, personal banking, and wealth management services.
Why Is WASH Risky?
- 4.3% annual net interest income growth over the last five years was slower than its banking peers
- Net interest margin of 2.3% reflects its high servicing and capital costs
- Earnings per share fell by 9.6% annually over the last five years while its revenue was flat, showing each sale was less profitable
At $35.83 per share, Washington Trust Bancorp trades at 1.2x forward P/B. If you’re considering WASH for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.