"You get what you pay for" often applies to expensive stocks with best-in-class business models and execution. While their quality can sometimes justify the premium, they typically experience elevated volatility during market downturns when expectations change.
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. Keeping that in mind, here are two high-flying stocks with strong fundamentals and one climbing an uphill battle.
One High-Flying Stock to Sell:
Caesars Entertainment (CZR)
Forward P/E Ratio: 29.5x
Formerly Eldorado Resorts, Caesars Entertainment (NASDAQ: CZR) is a global gaming and hospitality company operating numerous casinos, hotels, and resort properties.
Why Are We Hesitant About CZR?
- Flat sales over the last two years suggest it must innovate and find new ways to grow
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 10% annually
- High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate
Caesars Entertainment is trading at $24.13 per share, or 29.5x forward P/E. If you’re considering CZR for your portfolio, see our FREE research report to learn more.
Two High-Flying Stocks to Watch:
Bloom Energy (BE)
Forward P/E Ratio: 61.6x
Working in stealth mode for eight years, Bloom Energy (NYSE: BE) designs, manufactures, and markets solid oxide fuel cell systems for on-site power generation.
Why Will BE Beat the Market?
- Impressive 15.8% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Free cash flow profile has moved into positive territory over the last five years, indicating the company has achieved financial self-sustainability
- Improving returns on capital suggest its past investments are beginning to deliver value
At $36.55 per share, Bloom Energy trades at 61.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Leonardo DRS (DRS)
Forward P/E Ratio: 36x
Developing submarine detection systems for the U.S. Navy, Leonardo DRS (NASDAQ: DRS) is a provider of defense systems, electronics, and military support services.
Why Do We Watch DRS?
- Market share has increased this cycle as its 13.6% annual revenue growth over the last two years was exceptional
- Demand is greater than supply as the company’s 50.1% average backlog growth over the past two years shows it’s securing new contracts and accumulating more orders than it can fulfill
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 19.2% over the last two years outstripped its revenue performance
Leonardo DRS’s stock price of $41.43 implies a valuation ratio of 36x 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
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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-small-cap company Comfort Systems (+782% 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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