"You get what you pay for" often applies to expensive stocks with best-in-class business models and execution. While their quality can sometimes justify the premium, they typically experience elevated volatility during market downturns when expectations change.
Determining whether a company’s quality justifies its price causes headaches for nearly all investors, which is why we started StockStory - to help you separate the real opportunities from the speculative ones. That said, here is one high-flying stock with strong fundamentals and two with big downside risk.
Two High-Flying Stocks to Sell:
National Vision (EYE)
Forward P/E Ratio: 31.9x
Operating under multiple brands, National Vision (NYSE: EYE) sells optical products such as eyeglasses and provides optical services such as eye exams.
Why Do We Avoid EYE?
- Store closures are a headwind for growth and suggest it’s rightsizing operations to optimize sales at existing locations
- Poor expense management has led to an operating margin of 0.3% that is below the industry average
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its falling returns suggest its earlier profit pools are drying up
National Vision’s stock price of $19.86 implies a valuation ratio of 31.9x forward P/E. Dive into our free research report to see why there are better opportunities than EYE.
Stratasys (SSYS)
Forward P/E Ratio: 33.8x
Born from the Founder’s idea of making a toy frog with a glue gun, Stratasys (NASDAQ: SSYS) offers 3D printers and related materials, software, and services to many industries.
Why Should You Sell SSYS?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.7% annually over the last five years
- Performance over the past five years was negatively impacted by new share issuances as its earnings per share dropped by 13.6% annually, worse than its revenue
- Cash burn makes us question whether it can achieve sustainable long-term growth
At $10.83 per share, Stratasys trades at 33.8x forward P/E. If you’re considering SSYS for your portfolio, see our FREE research report to learn more.
One High-Flying Stock to Buy:
Wingstop (WING)
Forward P/E Ratio: 85.5x
The passion project of two chicken wing aficionados in Texas, Wingstop (NASDAQ: WING) is a popular fast-food chain known for its flavorful and crispy chicken wings offered in a variety of sauces and seasonings.
Why Do We Love WING?
- Average same-store sales growth of 16.9% over the past two years indicates its restaurants are resonating with diners
- Excellent operating margin of 25.3% highlights the efficiency of its business model
- WING is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Wingstop is trading at $343.12 per share, or 85.5x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
