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The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to new product launches, positive news, or even a dedicated social media following.

However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. On that note, here is one stock we think lives up to the hype and two best left ignored.

Two Momentum Stocks to Sell:

Unity (U)

One-Month Return: +21%

Started as a game studio by three friends in a Copenhagen apartment, Unity (NYSE:U) is a software as a service platform that makes it easier to develop and monetize new games and other visual digital experiences.

Why Does U Give Us Pause?

1. Products, pricing, or go-to-market strategy need some adjustments as its billings have averaged 10.2% declines over the last year

2. Competitive market dynamics make it difficult to retain customers, leading to a weak 95.8% net revenue retention rate

3. Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low

Unity is trading at $21.97 per share, or 5x forward price-to-sales. If you’re considering U for your portfolio, see our FREE research report to learn more.

Custom Truck One Source (CTOS)

One-Month Return: +24.9%

Inspired by a family gas station, Custom Truck One Source (NYSE:CTOS) is a distributor of trucks and heavy equipment.

Why Do We Avoid CTOS?

1. Sales trends were unexciting over the last two years as its 4.6% annual growth was below the typical industrials company

2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 29.2 percentage points

3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

Custom Truck One Source’s stock price of $4.56 implies a valuation ratio of 62.1x forward P/E. To fully understand why you should be careful with CTOS, check out our full research report (it’s free).

One Momentum Stock to Watch:

Roblox (RBLX)

One-Month Return: +35.7%

Best known for its wide assortment of user-generated content, Roblox (NYSE:RBLX) is an online gaming platform and game creation system.

Why Should RBLX Be on Your Watchlist?

1. Daily Active Users are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features

2. Marketing spend is minimal, showing it doesn’t need advertisements to acquire new users because of its well-known brand

3. Highly efficient business model is illustrated by its impressive 20.5% EBITDA margin