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. That said, here are two high-flying stocks to hold for the long term and one where the price is not right.
One High-Flying Stock to Sell:
Walmart (WMT)
Forward P/E Ratio: 36.1x
Known for its large-format Supercenters, Walmart (NYSE:WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.
Why Is WMT Not Exciting?
- Sizable revenue base leads to growth challenges as its 4.8% annual revenue increases over the last six years fell short of other consumer retail companies
- Widely-available products (and therefore stiff competition) result in an inferior gross margin of 24.7% that must be offset through higher volumes
- Performance over the past six years shows its incremental sales were much less profitable, as its earnings per share fell by 10.9% annually
Walmart is trading at $96.64 per share, or 36.1x forward P/E. Read our free research report to see why you should think twice about including WMT in your portfolio.
Two High-Flying Stocks to Watch:
Dutch Bros (BROS)
Forward P/E Ratio: 90.7x
Started in 1992 by two brothers as a single pushcart, Dutch Bros (NYSE:BROS) is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.
Why Should BROS Be on Your Watchlist?
- Rapid rollout of new restaurants to capitalize on market opportunities makes sense given its strong same-store sales performance
- Same-store sales growth over the past two years shows it’s successfully drawing diners into its restaurants
- Expected revenue growth of 23.1% for the next year suggests its market share will rise
At $58.92 per share, Dutch Bros trades at 90.7x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
American Superconductor (AMSC)
Forward P/E Ratio: 81.2x
Founded in 1987, American Superconductor (NASDAQ:AMSC) has shifted from superconductor research to developing power systems, adapting to changing energy grid needs and naval technology requirements.
Why Will AMSC Beat the Market?
- Impressive 45% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Free cash flow flipped to positive over the last five years, showing the company has crossed a key inflection point
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
American Superconductor’s stock price of $42.74 implies a valuation ratio of 81.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound 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 Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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