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 expanding its competitive advantage and two climbing an uphill battle.
Two High-Flying Stocks to Sell:
Caesars Entertainment (CZR)
Forward P/E Ratio: 58.8x
Formerly Eldorado Resorts, Caesars Entertainment (NASDAQ: CZR) is a global gaming and hospitality company operating numerous casinos, hotels, and resort properties.
Why Are We Wary of CZR?
- Sales were flat over the last two years, indicating it’s failed to expand its business
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- High net-debt-to-EBITDA ratio of 7× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Caesars Entertainment is trading at $20.26 per share, or 58.8x forward P/E. Dive into our free research report to see why there are better opportunities than CZR.
Sunrun (RUN)
Forward P/E Ratio: 14x
Helping homeowners use solar energy to power their homes, Sunrun (NASDAQ: RUN) provides residential solar electricity, specializing in panel installation and leasing services.
Why Are We Cautious About RUN?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
- Negative free cash flow raises questions about the return timeline for its investments
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $18.47 per share, Sunrun trades at 14x forward P/E. Read our free research report to see why you should think twice about including RUN in your portfolio.
One High-Flying Stock to Buy:
Robinhood (HOOD)
Forward EV/EBITDA Ratio: 37.8x
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 Are We Backing HOOD?
- 47.7% annual increases in its average revenue per user over the last two years show its platform is resonating with power users
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 58.5% outpaced its revenue gains
- HOOD is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
Robinhood’s stock price of $135.70 implies a valuation ratio of 37.8x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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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