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.
Separating true intrinsic value from speculation isn’t easy, especially during bull markets. That’s where StockStory comes in - to help you find high-quality companies that will stand the test of time. Keeping that in mind, here are two high-flying stocks with strong fundamentals and one facing an uphill battle.
One High-Flying Stock to Sell:
AAON (AAON)
Forward P/E Ratio: 46.8x
Backed by two million square feet of lab testing space, AAON (NASDAQ: AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings.
Why Does AAON Worry Us?
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 18.7% annually
- Cash-burning history and the downward spiral in its margin profile make us wonder if it has a viable business model
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
AAON is trading at $111.62 per share, or 46.8x forward P/E. Dive into our free research report to see why there are better opportunities than AAON.
Two High-Flying Stocks to Buy:
Nova (NVMI)
Forward P/E Ratio: 41.8x
Headquartered in Israel, Nova (NASDAQ: NVMI) is a provider of quality control systems used in semiconductor manufacturing.
Why Will NVMI Outperform?
- Market share has increased this cycle as its 30.8% annual revenue growth over the last two years was exceptional
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 28.8%, and its rise over the last five years was fueled by some leverage on its fixed costs
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 30.9% annually
Nova’s stock price of $453.07 implies a valuation ratio of 41.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Wingstop (WING)
Forward P/E Ratio: 30.9x
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 Should You Buy WING?
- Same-store sales growth over the past two years shows it’s successfully drawing diners into its restaurants
- Healthy operating margin of 25.9% shows it’s a well-run company with efficient processes, and its operating leverage amplified its profits over the last year
- Robust free cash flow margin of 16.3% gives it many options for capital deployment, and its improved cash conversion implies it’s becoming a less capital-intensive business
At $143.91 per share, Wingstop trades at 30.9x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
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.
