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 is one high-flying stock to hold for the long term and two climbing an uphill battle.
Two High-Flying Stocks to Sell:
U.S. Physical Therapy (USPH)
Forward P/E Ratio: 32.2x
With a nationwide footprint spanning 671 clinics across 42 states, U.S. Physical Therapy (NYSE: USPH) operates a network of outpatient physical therapy clinics and provides industrial injury prevention services to employers across the United States.
Why Is USPH Not Exciting?
- Subscale operations are evident in its revenue base of $729.6 million, meaning it has fewer distribution channels than its larger rivals
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 9 percentage points
- Diminishing returns on capital suggest its earlier profit pools are drying up
U.S. Physical Therapy is trading at $89.77 per share, or 32.2x forward P/E. Dive into our free research report to see why there are better opportunities than USPH.
Exponent (EXPO)
Forward P/E Ratio: 32.1x
With a team of over 800 consultants holding advanced degrees in 90+ technical disciplines, Exponent (NASDAQ: EXPO) is a science and engineering consulting firm that investigates complex problems and provides expert analysis for clients across various industries.
Why Are We Hesitant About EXPO?
- Muted 3.3% annual revenue growth over the last two years shows its demand lagged behind its business services peers
- Incremental sales over the last two years were less profitable as its earnings per share were flat while its revenue grew
- Waning returns on capital imply its previous profit engines are losing steam
At $65.80 per share, Exponent trades at 32.1x forward P/E. To fully understand why you should be careful with EXPO, check out our full research report (it’s free for active Edge members).
One High-Flying Stock to Buy:
CECO Environmental (CECO)
Forward P/E Ratio: 41.2x
With roots dating back to 1869 and a focus on creating cleaner industrial operations, CECO Environmental (NASDAQ: CECO) provides technology and expertise that helps industrial companies reduce emissions, treat water, and improve energy efficiency across various sectors.
Why Are We Backing CECO?
- Annual revenue growth of 18.6% over the past two years was outstanding, reflecting market share gains this cycle
- Market share is on track to rise over the next 12 months as its 22.3% projected revenue growth implies demand will accelerate from its two-year trend
- Adjusted operating margin expanded by 11.8 percentage points over the last five years as it scaled and became more efficient
CECO Environmental’s stock price of $50.99 implies a valuation ratio of 41.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
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 5 Strong Momentum 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 Tecnoglass (+1,754% 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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