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 is one high-flying stock to hold for the long term and two with big downside risk.
Two High-Flying Stocks to Sell:
Hilton (HLT)
Forward P/E Ratio: 33.3x
Founded in 1919, Hilton Worldwide (NYSE: HLT) is a global hospitality company with a portfolio of hotel brands.
Why Are We Wary of HLT?
- Annual sales growth of 8.4% over the last two years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
- Revenue per room has disappointed over the past two years due to weaker trends in its daily rates and occupancy levels
- Projected sales growth of 7.2% for the next 12 months suggests sluggish demand
Hilton’s stock price of $268.18 implies a valuation ratio of 33.3x forward P/E. If you’re considering HLT for your portfolio, see our FREE research report to learn more.
Casella Waste Systems (CWST)
Forward P/E Ratio: 79.9x
Starting with the founder picking up garbage with a pickup truck he purchased using savings from high school, Casella (NASDAQ: CWST) offers waste management services for businesses, residents, and the government.
Why Do We Think Twice About CWST?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 4.7 percentage points
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up
At $95.20 per share, Casella Waste Systems trades at 79.9x forward P/E. To fully understand why you should be careful with CWST, check out our full research report (it’s free).
One High-Flying Stock to Buy:
Robinhood (HOOD)
Forward EV/EBITDA Ratio: 44.1x
With a mission to democratize finance, Robinhood (NASDAQ: HOOD) is an online consumer finance platform known for its commission-free stock and crypto trading.
Why Will HOOD Beat the Market?
- Monetization efforts are paying off as its average revenue per user has grown by 40.9% annually over the last two years
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 54.6% over the last three years outstripped its revenue performance
- Robust free cash flow margin of 67% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy
Robinhood is trading at $102.90 per share, or 44.1x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. 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 Kadant (+351% 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
