Expensive stocks often command premium valuations because the market thinks their business models are exceptional. However, the downside is that high expectations are already baked into their prices, leaving little room for error if they stumble even slightly.
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 with strong fundamentals and two where the price is not right.
Two High-Flying Stocks to Sell:
Power Integrations (POWI)
Forward P/E Ratio: 37x
A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ: POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.
Why Are We Out on POWI?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 6.4% annually over the last five years
- Operating margin declined by 24.7 percentage points over the last five years as its sales cratered
- 9.2 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Power Integrations’s stock price of $61.50 implies a valuation ratio of 37x forward P/E. Read our free research report to see why you should think twice about including POWI in your portfolio.
Mercury Systems (MRCY)
Forward P/E Ratio: 77.2x
Founded in 1981, Mercury Systems (NASDAQ: MRCY) specializes in providing processing subsystems and components for primarily defense applications.
Why Is MRCY Not Exciting?
- Annual revenue growth of 1.7% over the last five years was below our standards for the industrials sector
- Persistent operating margin losses suggest the business manages its expenses poorly
- Earnings per share fell by 13.6% annually over the last five years while its revenue grew, partly because it diluted shareholders
Mercury Systems is trading at $112.08 per share, or 77.2x forward P/E. If you’re considering MRCY for your portfolio, see our FREE research report to learn more.
One High-Flying Stock to Watch:
Standex (SXI)
Forward P/E Ratio: 32.8x
Holding over 500 patents globally, Standex (NYSE: SXI) is a manufacturer and distributor of industrial components for various sectors.
Why Is SXI Interesting?
- Annual revenue growth of 11.2% over the last two years was superb and indicates its market share increased during this cycle
- Offerings are mission-critical for businesses and result in a stellar gross margin of 39.3%
- Highly efficient business model is illustrated by its impressive 15.5% operating margin, and its rise over the last five years was fueled by some leverage on its fixed costs
At $337.95 per share, Standex trades at 32.8x 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
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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 Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
