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 expanding their competitive advantages and one where the price is not right.
One High-Flying Stock to Sell:
Figs (FIGS)
Forward P/E Ratio: 52.1x
Rising to fame via TikTok and founded in 2013 by Heather Hasson and Trina Spear, Figs (NYSE: FIGS) is a healthcare apparel company known for its stylish approach to medical attire and uniforms.
Why Are We Wary of FIGS?
- Number of active customers has disappointed over the past two years, indicating weak demand for its offerings
- Estimated sales decline of 2% for the next 12 months implies a challenging demand environment
- Negative returns on capital show management lost money while trying to expand the business
Figs is trading at $4.55 per share, or 52.1x forward P/E. Read our free research report to see why you should think twice about including FIGS in your portfolio.
Two High-Flying Stocks to Watch:
Construction Partners (ROAD)
Forward P/E Ratio: 43.4x
Founded in 2001, Construction Partners (NASDAQ: ROAD) is a civil infrastructure company that builds and maintains roads, highways, and other infrastructure projects.
Why Do We Watch ROAD?
- Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 9.3% over the past two years
- Market share is on track to rise over the next 12 months as its 41.4% projected revenue growth implies demand will accelerate from its two-year trend
- Earnings per share grew by 100% annually over the last two years and trumped its peers
At $89.65 per share, Construction Partners trades at 43.4x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Amphenol (APH)
Forward P/E Ratio: 33.8x
With over 90 years of connecting the world's technologies, Amphenol (NYSE: APH) designs and manufactures connectors, cables, sensors, and interconnect systems that enable electrical and electronic connections across virtually every industry.
Why Will APH Beat the Market?
- Impressive 15.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Enormous revenue base of $16.78 billion provides significant distribution advantages
- Earnings per share grew by 19% annually over the last five years, massively outpacing its peers
Amphenol’s stock price of $80.51 implies a valuation ratio of 33.8x 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
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.
