“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 to hold for the long term and two with big downside risk.
Two High-Flying Stocks to Sell:
Neogen (NEOG)
Forward P/E Ratio: 33x
Founded in 1981 and operating at the intersection of food safety and animal health, Neogen (NASDAQ: NEOG) develops and manufactures diagnostic tests and related products to detect dangerous substances in food and pharmaceuticals for animal health.
Why Should You Sell NEOG?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3.2% annually over the last two years
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes
Neogen is trading at $8.83 per share, or 33x forward P/E. Read our free research report to see why you should think twice about including NEOG in your portfolio.
Viavi Solutions (VIAV)
Forward P/E Ratio: 43.2x
Once known as JDS Uniphase before its 2015 rebranding, Viavi Solutions (NASDAQ: VIAV) provides testing, monitoring and assurance solutions for telecommunications, cloud, enterprise, military, and other critical networks and infrastructure.
Why Are We Cautious About VIAV?
- 3.4% annual revenue growth over the last five years was slower than its industrials peers
- Performance over the past five years shows its incremental sales were less profitable as its earnings per share were flat
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Viavi Solutions’s stock price of $49.96 implies a valuation ratio of 43.2x forward P/E. Check out our free in-depth research report to learn more about why VIAV doesn’t pass our bar.
One High-Flying Stock to Watch:
iRhythm (IRTC)
Forward P/E Ratio: 298.5x
Pioneering the shift from bulky, short-term heart monitors to sleek, wire-free patches, iRhythm Technologies (NASDAQ: IRTC) provides wearable cardiac monitoring devices and AI-powered analysis services that help physicians detect and diagnose heart rhythm disorders.
Why Does IRTC Catch Our Eye?
- Market share has increased this cycle as its 23.9% annual revenue growth over the last two years was exceptional
- Additional sales over the last five years increased its profitability as the 27.5% annual growth in its earnings per share outpaced its revenue
- Free cash flow turned positive over the last five years, indicating the company has passed a significant test
At $110.34 per share, iRhythm trades at 298.5x 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
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
