Expensive stocks typically earn their valuations through superior growth rates that other companies simply can’t match. The flip side though is that these lofty expectations make them particularly susceptible to drawdowns when market sentiment shifts.
Finding the right balance between price and quality can challenge even the most skilled investors. Luckily for you, we started StockStory to help you identify the real opportunities. Keeping that in mind, here is one high-flying stock to hold for the long term and two where the price is not right.
Two High-Flying Stocks to Sell:
Under Armour (UAA)
Forward P/E Ratio: 59.1x
Founded in 1996 by a former University of Maryland football player, Under Armour (NYSE: UAA) is an apparel brand specializing in sportswear designed to improve athletic performance.
Why Is UAA Risky?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
At $6.82 per share, Under Armour trades at 59.1x forward P/E. Check out our free in-depth research report to learn more about why UAA doesn’t pass our bar.
STAAR Surgical (STAA)
Forward P/E Ratio: 32.1x
With over 2.5 million implants performed worldwide, STAAR Surgical (NASDAQ: STAA) designs and manufactures implantable lenses that correct vision problems without removing the eye's natural lens.
Why Do We Avoid STAA?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 5.7% annually over the last two years
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 26.6 percentage points
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
STAAR Surgical’s stock price of $24.65 implies a valuation ratio of 32.1x forward P/E. To fully understand why you should be careful with STAA, check out our full research report (it’s free).
One High-Flying Stock to Buy:
HEICO (HEI)
Forward P/E Ratio: 55.7x
Founded in 1957, HEICO (NYSE: HEI) manufactures and services aerospace and electronic components for commercial aviation, defense, space, and other industries.
Why Will HEI Beat the Market?
- Market share has increased this cycle as its 18.3% annual revenue growth over the last two years was exceptional
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 32.7% annually
- Strong free cash flow margin of 17.4% enables it to reinvest or return capital consistently
HEICO is trading at $360.45 per share, or 55.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
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.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth 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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
