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.
Determining whether a company’s quality justifies its price causes headaches for nearly all investors, which is why we started StockStory - to help you separate the real opportunities from the speculative ones. That said, here are two high-flying stocks to hold for the long term and one with big downside risk.
One High-Flying Stock to Sell:
Impinj (PI)
Forward P/E Ratio: 77.1x
Founded by Caltech professor Carver Mead and one of his students Chris Diorio, Impinj (NASDAQ:PI) is a maker of radio-frequency identification (RFID) hardware and software.
Why Do We Think Twice About PI?
- 8.6% annual revenue growth over the last two years was better than the sector average, highlighting the value of its products and services
- Suboptimal cost structure is highlighted by its history of operating margin losses
- Negative returns on capital show that some of its growth strategies have backfired
Impinj is trading at $183.43 per share, or 77.1x forward P/E. To fully understand why you should be careful with PI, check out our full research report (it’s free).
Two High-Flying Stocks to Buy:
Cloudflare (NET)
Forward P/S Ratio: 38.2x
With a massive network spanning more than 310 cities in over 120 countries, Cloudflare (NYSE:NET) provides a global network that delivers security, performance and reliability services to protect websites, applications, and corporate networks.
What Makes NET Stand Out?
- Billings have averaged 34.7% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Notable projected revenue growth of 29.6% for the next 12 months hints at market share gains
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
Cloudflare’s stock price of $347.97 implies a valuation ratio of 38.2x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
HEICO (HEI)
Forward P/E Ratio: 42.6x
Founded in 1957, HEICO (NYSE:HEI) manufactures and services aerospace and electronic components for commercial aviation, defense, space, and other industries.
Why Do We Love HEI?
- Market share has increased this cycle as its 17% annual revenue growth over the last two years was exceptional
- Earnings per share have massively outperformed its peers over the last two years, increasing by 32.8% annually
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $296.15 per share, HEICO trades at 42.6x forward P/E. Is now a good time to buy? See for yourself in our comprehensive 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.