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 where the price is not right.
One High-Flying Stock to Sell:
Under Armour (UAA)
Forward P/E Ratio: 62.3x
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 Do We Think UAA Will Underperform?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Negative free cash flow raises questions about the return timeline for its investments
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Under Armour is trading at $4.84 per share, or 62.3x forward P/E. To fully understand why you should be careful with UAA, check out our full research report (it’s free).
Two High-Flying Stocks to Watch:
Woodward (WWD)
Forward P/E Ratio: 32.6x
Initially designing controls for water wheels in the early 1900s, Woodward (NASDAQ: WWD) designs, services, and manufactures energy control products and optimization solutions.
Why Will WWD Beat the Market?
- Market share has increased this cycle as its 13.7% annual revenue growth over the last five years was exceptional
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
At $324.25 per share, Woodward trades at 32.6x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
iRhythm (IRTC)
Forward P/E Ratio: 153.4x
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 Do We Watch IRTC?
- Impressive 24% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Earnings per share grew by 17.4% annually over the last five years and trumped its peers
- Free cash flow margin is now positive, showing the company has crossed a key inflection point
iRhythm’s stock price of $105.02 implies a valuation ratio of 153.4x forward P/E. Is now a good time to buy? Find out in our full 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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
